Import finance for small businesses: paying overseas supplier deposits and landed costs

Many young Australian product brands are designed here and made overseas. That’s a sound model, but it creates one of the longest cash gaps in small business. You pay a deposit when the order is placed, the balance before goods leave the factory, and border and freight costs on arrival, often long before the first customer buys a unit.

What does the cash gap look like when you import?

A typical import cycle has three waves of cash out before any comes back in:

Stage	What you pay	Timing
Order placed	Supplier deposit	At order, often weeks before production
Before shipping	Supplier balance	When goods are finished, before they leave
On arrival	Freight, insurance, brokerage, duty, import GST, charges	When goods land and clear
After arrival	Local delivery, receiving into warehouse or 3PL	A few days to weeks later
Sales	Customer payments arrive	Weeks or months after that

Every row above “Sales” is money you’ve already spent. For a first production run, that gap can stretch across several months.

What costs do founders forget to budget?

The supplier invoice is the obvious one. According to business.gov.au, importers should also budget for:

• GST on import, which applies to most goods brought into Australia.
• Customs duty, depending on the type of goods and where they’re from.
• Import processing charges and, for some products, biosecurity fees.
• Transport, insurance and storage from port to your premises.
• Customs broker fees, if you use one. Goods valued over $1,000 generally need a formal import declaration, and a licensed broker can lodge it.

If you’re registered for GST and the goods are for your business, you can generally claim the import GST back as a credit on your BAS. But you still have to pay it at the border and wait for the next BAS to recover it. For quarterly lodgers, the due dates are 28 October, 28 February, 28 April and 28 July, so that credit can take a while to come back.

How is import stock usually funded?

A line of credit works well because you can draw at each stage — deposit, balance, landing costs — and pay down as the stock sells. Unsecured and line-of-credit options are typically $5,000 to $500,000, sized on turnover and bank statements.

A short-term unsecured loan can suit a single, well-understood production run where you know the total landed cost in advance.

A property-secured business loan from $20,000 suits larger orders, a first production run where trading history is short, or when the import is part of a bigger launch.

If your next order is already quoted, check your funding options. The enquiry takes about a minute and involves no credit check.

Illustrative example: a first factory order for a bag brand

Illustrative only. A Sydney bag brand has been selling small batches from a local maker. It wants to move to an overseas manufacturer for its three best-sellers. The first order of 1,500 units has a factory cost of $31,000. The founder estimates freight, brokerage, duty, import GST and charges will add roughly another $7,000, and local delivery to the 3PL about $600.

Her first plan only covered the factory invoice. Once the full landed cost was mapped, the funding needed rose from $31,000 to nearly $39,000, with money going out in three stages over about ten weeks. Structuring the facility to match those stages meant she only carried the full amount for a few weeks before the first sales started coming in.

How do I reduce the risk of borrowing for imports?

• Order samples first and approve them in writing before paying a deposit.
• Check your supplier. Look for verified manufacturers and consider an inspection before the balance is paid.
• Get a landed-cost quote from a freight forwarder or broker before committing.
• Don’t over-order to hit a price break if the extra stock would take a year to sell.
• Keep ad budget aside. Imported stock still needs customers; the payback calculator helps you balance the two.

Should I pay in stages or all at once?

Staging payments to suppliers reduces risk and eases cash flow, but it depends on what your supplier will accept. A few common structures:

• Deposit and balance. A portion at order, the rest before shipping. The most common arrangement for new relationships.
• Balance against documents. The balance is paid once shipping documents are issued, which gives some comfort the goods have actually left.
• Terms after delivery. Less common for new brands, but possible once you have a track record with a supplier.

Whichever structure you use, map every payment date on a single timeline alongside your expected sales. That timeline is also what you’d show a lender. It explains exactly when money goes out, when it comes back and how long any funding needs to be carried. Many founders find that once the timeline is drawn, the amount they actually need to borrow is smaller than they thought, because the stages are spread out.

Bring your next shipment home without the squeeze

If an overseas order is the thing standing between your brand and its next stage of growth, let’s look at how to fund it properly. Tell us about the order. There’s no credit check to enquire, your details aren’t sent to a queue of lenders, and a real person will call to talk through timing and structure. Please give us accurate answers on the form — turnover, months trading and any property you own — so we can suggest the right option from the start. You may also want to read about peak-season stock and inventory finance.