Why Pay4 is the ideal finance for businesses that import

Why Pay4 is the ideal finance for businesses that import

The average UK importer has ten overseas suppliers and purchases goods from five countries. Importing can be a vital part of driving both efficiency and growth for many businesses. However, trading internationally can require significant financial investment. Added costs in transport, insurance, import duty and taxes, as well as funding gaps can place a strain on your cash flow. Trading internationally also places increased emphasis on the security of your supply chain. Incorporating flexible business finance into your working capital strategy can help. It can reduce risk, ease cash flow pressure and help you secure optimal supplier relationships. Here we explain why Pay4 is the ideal finance for businesses that import.


Why import?


Importing - purchasing products or services from another country - brings a range of benefits for both businesses and the wider economy. Particular sources of supply can provide higher quality, lower cost and regionally exclusive materials and technologies in comparison to domestic sources. Other benefits of importing for UK businesses include:

Reduced costs


Importing reduces manufacturing costs through comparative advantage. The conditions in a particular foreign market may allow for much cheaper production expenses, thanks to factors like low labour costs, lower tax schemes, etc. If you can find high-quality and ethically sourced products/materials at a lower cost abroad, then importing is a great way to cut your costs and boost your bottom line. You can also achieve economies of scale through bulk ordering, and early payment discounts

Improved quality


Importing can also enhance the quality of your offering, a factor that you can incorporate directly into your value proposition. Each country has its own strengths and specialities, and choosing the right international supplier can mean you have the very best materials to work with.

The best foreign manufacturers and sellers may also include training, as well as additional standards and practices as a part of their supply contract. This is to ensure their buyers are well prepared to sell their product. Manufacturers also know that their reputation rests on the quality of the products they produce, so if you build your offering around imported goods, the quality of your end product will likely be enhanced. Of course, this element comes down to choosing the right supplier for your business.

Enhanced competitiveness


Importing also allows your business to introduce new and improved products to the market quicker. This can help you to become a market leader in your chosen industry. Manufacturing new products is an ongoing and time-consuming process. However, importing unique products can enhance your competitiveness in a relatively swift and inexpensive manner.

It’s not only goods or materials that you can import, or at least pay internationally for. Overseas outsourcing is a great way to achieve competitiveness. Outsourcing data services, call centre operations, web development etc. and using a finance facility to pay, can really give you a competitive edge. More on that later in this article.

Why Pay4 is the ideal business finance product


Importing can be a great way to improve your profitability and competitiveness. Yet it is often more complex than buying from a domestic seller. Foreign cultures and regulations, supply chain reliability, payment issues, supplier terms and exchange rate fluctuations can all present additional risks. Having the right finance for businesses that import can help to reduce your exposure to these elements.

Pay4 can be used to pay suppliers both in the UK and worldwide, and we are an ideal form of working capital finance for businesses that import. Here’s why.

Pay4 reduces risk from currency fluctuations


According to Bibby Financial Services, businesses trading overseas have lost on average £70,000 over the past year due to currency fluctuations. Yet just two-fifths review their FX arrangements more than once a year. Many businesses contract with suppliers at an agreed price and run the risk of the currency price changing between the contract being entered into and the invoice actually being paid. Using Pay4 to pay suppliers earlier, perhaps upon agreement of the contract, can help you to avoid the chances of exchange rates adversely altering your supply costs and eroding your anticipated profit margin. By settling supplier invoices worldwide swiftly and efficiently, Pay4 provides an effective FX service.

Pay4 enhances your supply chain


1. By facilitating prompt, regular payment


Just like any business, your international suppliers are concerned with their cash flow above all else. Using Pay4’s readily available revolving credit to pay your international suppliers regularly, either on time or early, will strengthen your supplier relationships. This, in turn, will make them more likely to treat you as a preferred customer. They will work with you to optimise your supply. Providing your international suppliers with regular, consistent and prompt payment also ensures they are in the best possible position to be robust and secure. This helps to minimise the risk of supply chain failure.

2. By smoothing demand spikes


Seasonal or unforeseen fluctuations in demand can be a headache for suppliers, impacting their cash flow as well as yours. Using Pay4 to purchase stock in advance will allow you to smooth out the peaks in demand that create problems in your supply chain. This means more regular orders for your suppliers, and optimised stock levels for you.

3. By enhancing your negotiation power


Having Pay4’s credit facility available as and when required ensures that should a sought-after supplier opportunity present itself, you have the working capital to negotiate from a position of strength. This enables you to negotiate longer payment terms, volume discounts, competitor-matching discounts and better contractual terms. (accountability, clauses, compliance etc)

4. By facilitating larger shipments


The extra liquidity that a consistently available facility like Pay4 provides will help you to secure a more cost-effective order of stock/materials, using fewer but larger consignments. You’ll be more attractive to sellers, who prefer to work with fewer quantities of large shipments. You'll also open up the possibility of securing bulk discounts.

Pay4 closes cash flow gaps between purchase and sale


Securing the right supplier relationship can sometimes come with some restrictive terms. Suppliers may require prepayment for both goods and shipping costs and this means your cash can be tied up for 30 to 60 days before you have products to sell. In turn, your customers often pay their invoices around 30 days after receiving your goods, meaning there's a potential wait of up to four months before you receive the cash back into your business. Your cash flow will be under significant pressure and without the right funding, your business could suffer. Using Pay4 to settle your supplier invoices, effectively extends the credit period offered by your suppliers.

Pay4 helps you optimise stock levels


In order to minimise the risk of supply chain failure or individual consignment problems affecting your order fulfilment and reputation, you may want to hold extra stock. By using Pay4, you can purchase additional stock without putting extra pressure on your cash flow.

Importing success


Final tips for you. When importing from overseas suppliers, be sure to do the following:

  • Conduct market research on your chosen country and its politics, economy, culture and business environment
  • Assess the reliability of overseas suppliers - their management systems and working practices. Visit them if possible.
  • Get samples of products - check they meet UK legal standards
  • Have a clear contract setting out who is responsible for transport at every stage. Use internationally accepted Incoterms to set out exactly what delivery terms you have agreed
  • Use a product like Pay4 that is an ideal form of finance for businesses that import. This will help enhance your negotiation position. Reduce the burden on your cash flow, reduce your exposure to foreign exchange risk and strengthen your supplier relationships.


Importing can be an extremely effective way to enhance your product offering and grow your business while reducing costs. Pay4’s unique finance facility and simple online payment technology allows you to settle invoices worldwide promptly and via a cost-effective form of credit. Incorporating it into your import finance strategy will ensure your business is in the best possible position to capitalise on the opportunities importing can bring.