What Is Trade Finance? How Importers Fund Stock Before It Sells
Manufacturing Hub
Import finance · Landed cost · Working capital
This guide follows the cash problem an Australian importer actually has: the supplier wants money before the stock earns anything. It covers deposits and payment terms, what “100% funding” really means, full landed cost, duty and GST timing, security without property, first-import eligibility, facility sizing across overlapping orders, approval timing, rollover and partial repayment, and the point where trade finance should hand off to inventory, invoice or broader working-capital finance.
Quick Answer
Trade finance is short-term business funding used to pay an overseas supplier before imported stock generates revenue. Depending on the facility, it can fund a supplier deposit or balance and may also carry selected freight, duty, import GST or other landed-cost lines. “100% of the supplier invoice”, “100% of the cost of goods” and “100% of the total landed cost” are not the same promise. A letter of credit or documentary collection can change payment risk and timing, while actual funding depends on the approved facility behind the transaction. Before you agree the order, map the trade terms, the full landed cost, the peak overlap across live shipments and the date each drawing must be repaid.
Also called: trade finance, import finance, import funding, supplier finance.
Start where you actually are
You have not signed the order yet. Go to the payment terms to settle before the deposit becomes irreversible.
The supplier wants a deposit before production starts and the cash is not there. Go to where deposit money comes from.
A new supplier wants a bank-backed payment promise. Go to letter of credit versus actual funding.
You have a supplier quote and cannot tell what the whole shipment will cost or which lines the facility may cover. Go to landed-cost funding.
A lender says it can fund “100%” and you need to know 100% of what. Go to supplier invoice versus landed cost and peak facility sizing.
This is your first container, or you have no property to offer as security. Go to first-import eligibility and what “no property security” still allows a lender to take.
The goods are on the water and the Australian dollar has moved. Go to what the FX move changes.
Duty, GST or port charges are about to fall due. Go to what must be paid before sale and what may be deferred.
You need to know the cost of the facility. Go to how to compare the full dollar cost.
The supplier deadline is close and you need to know whether a new facility can be arranged in time. Go to approval and drawdown timing.
The maturity date is approaching before the goods have produced enough cash. Go to rollover, extension and partial repayment.
The stock arrived and it is selling slower than planned, or it sold but your customer has not paid. Go to what the next finance conversation becomes.
This is becoming a repeat import cycle and the next order overlaps the last one. Go to how to size a repeat facility.
What is trade finance, and how is it different from just paying an overseas supplier?
Trade finance is a facility that funds an import transaction before the goods generate revenue, commonly by paying the overseas supplier at an agreed milestone and being repaid from the sale of the stock. Laid out in sequence, it works like this: you agree terms and issue a purchase order, the supplier is paid under the agreed structure, the goods are produced and shipped, they land and clear customs once duty and import GST are dealt with, you take delivery and sell, and the sale proceeds clear the drawing or restore the limit. The facility is sized against the trading cycle, not against a machine you intend to keep.
The reason this is worth spelling out is that payment method, payment assurance and funding are different questions. A telegraphic transfer moves money. A documentary collection lets banks control shipping documents against payment or an undertaking to pay. A letter of credit is a bank undertaking to pay when compliant documents are presented, and it can be at sight or on agreed term or usance timing. Trade or import finance is the part that supplies credit for the transaction. An LC or collection can therefore change supplier risk and payment timing without automatically answering where the importer obtains the cash or credit needed to settle.
That distinction decides both which product you need and whether this page is the right one for you. The table below separates the different searches before the rest of the guide follows the importer who is buying stock, components or materials to resell or consume.
| What you are actually doing | Why it is a different question | Where to go |
|---|---|---|
| Sending money to an overseas supplier when the cash is already there | A payment and currency question, not a funding one | Your bank or a payment provider |
| Importing a machine or plant you will keep and use | Funded on the asset, not the trading cycle | Importing business equipment |
| Your own customer has offered you an early payment or supply chain finance programme | That is finance on your receivable, assessed on the customer who owes you, not on the stock you are buying | Invoice finance |
| Exporting Australian goods or services | A different product set with government support attached | Export Finance Australia |
| Working in the trade finance industry | A career question that happens to share the words | Not this page |
| Importing stock, components or materials to resell or consume | Funded on the purchasing cycle, repaid when the stock sells | This page |
The second row is worth pausing on, because the line between the two is cleaner than most people expect. Goods that turn over are funded as trade, inventory or working capital. A single machine you will own and run for years is funded as equipment finance, on the asset itself, and the sibling guide on importing business equipment covers that lane end to end. If your container holds one press and nothing else, that guide is the better read. If it holds a thousand units you intend to sell, stay here. A useful worked view of how the two sit side by side is the Melbourne importer cashflow map.
Where does the money for a supplier deposit actually come from?
A supplier deposit is funded from one of four places: the business's own cash, a facility that pays the supplier directly, a facility secured against something else in the business, or a renegotiated payment schedule with the supplier so that less money falls due at the front. Most published guidance stops at how to send the payment rather than where it comes from. Most importers end up using a combination, and the mix shifts as the business builds a track record with that supplier.
The first source is your own working capital, and it is the cheapest until it is not. A deposit paid from cash that was earmarked for wages, rent or an existing repayment is not free money; it has just moved the pressure to a different date. The second is a facility that pays the supplier as part of the transaction, sized on the order and cleared when the stock sells. The third is broader security: a business overdraft, a line of credit, or a facility secured against property or equipment already in the business, used for a purpose the lender has agreed. The fourth is not borrowing at all, and it is the one most often skipped.
What makes a deposit request fundable
- A signed purchase order or pro forma invoice naming the goods, the quantity and the price
- A supplier you have dealt with before, or one that survives a basic check
- A named end customer, or a sales history for the same class of stock
- A landed cost you can show line by line, not just the supplier invoice
- A repayment source that is the sale of the goods, not the next order
- Recent bank conduct that reads clean, with no unexplained dishonours
What stalls it
- A deposit request with nothing behind it yet, no order and no pricing
- A first order with a supplier nobody can verify from outside
- Goods with no resale history, no buyer, and no comparable line
- A cost estimate that stops at the supplier invoice
- A deposit that is quietly covering a shortfall from an earlier shipment
- An existing account already sitting at its limit
When a letter of credit solves the supplier problem, and when it does not solve the funding problem
A standard import letter of credit is primarily a payment undertaking: the bank promises to pay the supplier when the required documents comply. It uses the importer's credit with the issuing bank, so an importer who has no approved line has not automatically created new funding simply by asking for an LC. But "letter of credit" is not one single structure. Deferred or usance terms can push payment to a later agreed date, and revolving credits can support a series of transactions. That is why the first question is whether the problem is supplier assurance, funding, or both.
For a new supplier, the LC can solve the trust problem even where the business could otherwise fund the purchase itself. For a cashflow gap, the importer still needs to know what supports the bank line and when the bank will debit or require reimbursement. If the business needs both supplier assurance and time before repayment, ask specifically about deferred-payment structures rather than assuming a sight LC and an import loan are interchangeable. Where those options sit against other cashflow products is covered in which product this actually is.
Which supplier payment option actually provides funding?
Do not compare these options as though they all solve the same problem. NAB's current Australian trade-payment guidance separates prepayment, documentary letters of credit, documentary sight and term collections and post-shipment payment, and states that a letter of credit facility must be arranged before an LC can be issued. The useful question for an importer is therefore two-part: what protects or satisfies the supplier, and what actually provides the money or credit when payment falls due?
| Option | Provides new funding by itself? | Supplier payment assurance | Can it solve an upfront deposit gap? | Best fit |
|---|---|---|---|---|
| Telegraphic transfer / prepayment | No. It is a payment method | High for the supplier once funds arrive; little protection for the importer before shipment | Only if the importer already has cash or another facility | The cash already exists and the supplier requires payment before shipment |
| Supplier terms | The supplier, not a financier, is extending trade credit | Depends on the relationship and contract | Potentially, if the supplier agrees to reduce or defer the deposit | An established relationship where the supplier will move payment dates |
| Documentary collection | No, not by itself | Lower than an LC; the bank controls documents but does not give the same payment undertaking | Usually not the answer to a pre-production deposit | The supplier will ship before payment but wants bank-controlled documents or a future-dated undertaking |
| Letter of credit | Not automatically. It requires an approved bank facility or cash backing, although term/usance structures can defer reimbursement | Yes, subject to compliant documents and the LC terms | Not usually the simplest deposit mechanism; structure matters | A new or higher-risk supplier needs bank-backed payment assurance |
| Trade / import finance | Yes. It is the funding layer | The supplier is paid under the financier's agreed process | Some facilities can fund an agreed supplier deposit | The goods have to be paid for before they generate revenue |
| Business line of credit | Yes. It is general business funding rather than transaction-specific trade funding | No separate payment assurance to the supplier | Potentially, if the purpose is permitted and unused limit is available | The business wants flexible working capital across more than one purpose |
Australian bank guidance describes a pre-shipment telegraphic transfer as the importer paying before the exporter ships, a documentary letter of credit as a bank undertaking that can be payable at sight or at a later agreed date, and documentary collections as bank-controlled release of documents against payment or an undertaking to pay. Your own bank publishes the equivalent guidance, and it is worth reading before you agree a payment method with the supplier. Those are documented payment mechanics. Whether a separate financier will fund the deposit, balance or landed-cost lines is still a credit decision under that financier's product.
Before you place the order: settle the cash dates, not just the price
The cheapest time to solve an import funding problem is before the purchase order and non-refundable deposit lock the payment schedule in. Write the supplier milestones beside the expected manufacturing, shipping, customs-clearance, sale and customer-payment dates. A 30 per cent deposit can be manageable on its own and still create a shortfall if the 70 per cent balance, freight and border costs fall before the first customer cash arrives.
Ask the supplier what can move before you ask a financier to absorb it: a smaller deposit, staged production payments, part shipments, payment on documents, or 30, 60 or 90 day terms after shipment. Then size the facility against the remaining peak gap. Finance should fit the commercial terms; signing the commercial terms first and trying to make finance fit afterwards is how otherwise profitable orders become urgent.
If the supplier wants the money this week
Start with the levers that do not involve borrowing, because they are faster and they cost nothing. Ask to split the milestone differently, so less falls at order and more falls at shipment or on documents. Ask for part shipment, so a smaller quantity moves now and the balance follows. Offer staged release against production photographs or a third party inspection, which gives the supplier comfort without giving them the whole deposit. Ask what the price looks like on a longer balance term. Suppliers negotiate more often than importers expect, particularly where the relationship is worth keeping, and the same dynamic runs in reverse when a supplier cuts your credit terms.
If none of that closes the gap, then the facilities are the answer, and the honest position is that speed and cost move together. A facility arranged against a clean, documented transaction takes longer to put in place than one secured against property or an existing asset, and short notice narrows the field. The time-critical stock purchase explainer covers what the fast end of that market involves and what it costs you in flexibility. For sector context, the manufacturing hub and the cafe and hospitality hub both carry deposit-stage material.
Which of your landed costs will a facility actually fund?
Which landed costs can be funded depends on the facility. The supplier invoice is normally the core transaction amount, while freight, insurance, customs duty, import GST, broker fees and port charges may be inside the limit, separately funded or left for the importer to pay. Do not size the facility from the supplier invoice and assume the rest will follow. Confirm every line in writing, because the difference between "approved limit" and "cash required to release and deliver the goods" is where otherwise workable imports run short.
“100% of the supplier invoice”, “100% of the cost of goods” and “100% of the total landed cost” are three different propositions. A financier can truthfully fund all of the goods and still leave the importer paying freight, insurance, customs duty, import GST, customs brokerage and port charges from another source. The fourth number is the one repeat importers miss: the facility limit needed when two or more shipments are live at once. That can be materially larger than the supplier invoice for any single order.
Work it as a method rather than a benchmark, because the numbers move with every shipment, every currency movement and every tariff classification. The consolidation table below sets out every line in an import landed cost in the order the money leaves your account, names who invoices you for it, says when it falls due, and states what a lender typically asks to see before it will fund that line. It carries no dollar figures on purpose. Values vary per transaction and per financier, and a figure copied from someone else's shipment is worse than no figure at all.
| The cost line | Who invoices you | When it falls due | What evidence a lender asks for | Typical treatment in a supplier-payment facility |
|---|---|---|---|---|
| Supplier invoice for the goods | The overseas supplier | At order, at shipment, or on documents, per your contract | Purchase order or pro forma invoice, with quantity, unit price and currency | Core line. This is normally the amount the transaction is built around |
| International freight | Freight forwarder or shipping line | Booking or on arrival, depending on terms | A written forwarder quote, not an estimate, showing the agreed incoterm | Sometimes. Inside where the forwarder invoice is presented with the supplier invoice |
| Marine insurance | Insurer or forwarder | Before the goods sail | Certificate of insurance naming the goods and the voyage | Often separate. Some structures include it; others require it to be paid outside the draw |
| Customs duty | Paid through your customs broker | Before the goods are released from customs control | Broker estimate against the tariff classification, and against any preferential rate you intend to claim on origin | Varies. Some facilities include duty; others leave border charges outside the draw |
| Import GST | Paid through your customs broker, or deferred to your activity statement | With the duty, unless you are approved for GST deferral | Broker calculation of the value of the taxable importation | Varies. Confirm whether GST is funded, separately bridged or expected to be deferred or paid from cash |
| Customs broker fee | Your customs broker | On clearance | The broker's fee schedule or quote for the entry | Often separate. Confirm whether the facility carries this line or whether it must be paid from working capital |
| Terminal access and port charges | Transport operator or customs broker, passed through | On collection from the terminal | The transport operator's quote, or the terminal's published schedule | Often separate. Confirm whether the facility carries this line or whether it must be paid from working capital |
| Storage and detention | Terminal operator and shipping line, separately | Daily, once free time expires | Nothing in advance. It is a risk, not a budgeted line | Usually a borrower risk rather than a planned advance. It can grow while finance or clearance is delayed |
Two of those lines are set by statute rather than by anyone's commercial judgement, so they are worth stating with their sources attached. The Australian Border Force states that the value of the taxable importation is the sum of the customs value of the goods, any duty payable, the amount paid or payable to transport the goods to Australia and to insure them for that transport, and any wine equalisation tax payable where applicable. It also states that the GST Act requires the importer to pay GST at the same time and in the same manner as customs duty is paid. Both are on the Border Force page covering GST and other taxes on imported goods, last updated 1 July 2026 and read 7 September 2026. The mechanics of the calculation itself are set out in the value of the taxable importation entry rather than restated here.
The Australian Taxation Office states that GST is generally payable before the goods are released by Home Affairs, that the GST payable is 10 per cent of the value of the taxable importation, and that an approved importer may defer the payment of GST on taxable importations until the first activity statement lodged after the goods are imported. That is on the ATO page covering GST and imported goods, last updated 13 May 2024 and read 7 September 2026. Eligibility and mechanics sit in the deferred GST scheme entry. The point for a funding conversation is narrower: deferral changes the timing of one line, not all of them, and it is not a substitute for having the money.
How a free trade agreement changes the duty line
The duty in your landed cost is not set by what the goods are alone. It is set by how they are classified and by where they originate, and a preferential rate under a free trade agreement or another preferential arrangement can move that line a long way, in some cases to nothing. That matters twice on a funding page: it changes the total you need, and it changes the size of the facility you should be asking for.
The catch is evidentiary rather than arithmetic, because the claim is yours to make and yours to stand behind. The Australian Border Force states that before making a claim for preferential rates of customs duty, importers must take reasonable care to ensure that their goods meet the relevant rules of origin, and its guidance sets out the documentary evidence and the record keeping a claim has to rest on. Rules of origin decide whether goods have undergone enough work or processing in the claimed country to earn the preferential rate, which is a different question from where they were shipped from. Read on the Border Force guide to preferential rules of origin, as at 29 August 2025 and read 7 September 2026. Note what that guide covers: preferential arrangements other than free trade agreements. The Border Force publishes a separate guide for each of Australia's free trade agreements, and your customs broker works to whichever one applies to your goods.
Two practical points follow for the funding conversation. Budget on the duty you can actually evidence rather than the duty you hope to claim, because a preference the paperwork will not support turns into a shortfall at the border instead of a saving at the desk. And if duty is overpaid, a refund route exists: the same Border Force guidance states that the period for lodging a refund is generally within four years after the date on which the customs duty was first paid. A refund four years out is not cashflow. Settling the classification and the origin evidence before the goods ship is.
What happens to your landed cost when the exchange rate moves
The price you agreed in the supplier's currency is not the price you will pay in Australian dollars, because the rate moves between the day you commit and the day the money actually leaves. That gives an import two separate currency exposures, and most landed cost workings only account for the first one.
The first runs from order to payment. You agree a price, you build a landed cost around it, and then weeks or months pass before the balance is paid, by which time the Australian dollar cost of the same invoice has moved. The second runs from payment to sale, and it is the one that quietly damages margins: your selling price was set on an assumed landed cost, so a rate movement between the two does not change what the customer pays, only what you keep. On a thin-margin line, a modest movement can take more than the freight did.
There are three questions worth settling in writing before the money moves, and none of them requires a forecast. Which currency does the facility actually pay in, because a facility that pays your supplier in their currency and a facility that pays you in Australian dollars leave the conversion risk in different places. Who does the conversion, and at what margin over the market rate, since that spread is a real cost line that rarely appears on a fee schedule. And whether you are hedging or not, which is a deliberate decision either way: a forward contract fixes a rate for a future date, but it is a separate product with its own cost and its own obligation to settle whether or not your shipment happens. Which of those suits your business is a conversation for your bank or currency provider and your accountant, not something to decide from a search result.
How to work out your own landed cost before you ask for a facility
Run this on your own quote before you ask anyone for money. It takes an hour and it changes the conversation, because it turns a request for a number into a request for a facility.
- Start with the supplier invoice in the currency it is issued in, and convert at a rate you can evidence on the day you commit rather than the day you enquired. Note the rate and the date on the page, so you can see later what moved.
- Add international freight and marine insurance to the Australian port of discharge, taken from the forwarder's written quote and read against the incoterm you actually agreed, meaning the three-letter delivery term in your contract that decides where the supplier's responsibility ends and your cost and risk begin.
- Take the customs value your broker will declare. It is not always the invoice total, and the difference is worth understanding before it appears on an entry.
- Add the customs duty your broker calculates against the tariff classification for the goods, which is a classification question rather than an arithmetic one.
- Build the value of the taxable importation from those parts, using the Border Force definition above, then apply GST to that figure rather than to the invoice.
- Add the domestic lines: the broker fee, terminal access and port charges, transport from the terminal to your premises, and any handling or unpack.
- Total it, then annotate every line with who invoices you for it and the week it falls due. The timing column is the one that reveals the real gap.
- Take that page into the facility conversation. A funder can size against it; nobody can size against a supplier invoice and a hope.
The same exercise, run on a machine rather than on stock, is worked through in the landed cost against valuation explainer, which is worth reading if your container holds both. Importers who reclaim GST credits on the same cycle should also look at the GST credit bridge, because the timing mismatch it describes applies to stock as well as plant.
How much trade finance do you need when import orders overlap?
Size a repeat trade facility to the highest amount outstanding across all live shipments, not to the purchase price of one order. The exact calculation depends on what the financier actually funds and when sale proceeds reduce each drawing. The example below is deliberately simple so you can see the difference between a supplier-invoice limit and the total capital tied up.
| Point in the cycle | Order 1 outstanding | Order 2 funded | Supplier-funding limit in use |
|---|---|---|---|
| Order 1 supplier fully paid | $100,000 | $0 | $100,000 |
| $25,000 of Order 1 repaid | $75,000 | $0 | $75,000 |
| Order 2 deposit paid | $75,000 | $30,000 | $105,000 |
| Order 2 balance paid before more Order 1 repayment | $75,000 | $100,000 | $175,000 |
Now add the costs the supplier invoice does not show. If each shipment also needs, for illustration, $22,000 of freight, insurance, duty, import GST, brokerage and port costs that the trade facility does not fund, two overlapping shipments can create another $44,000 cash requirement if those lines overlap before further sales come in. The numbers here are illustrative, not a quote and not a tax calculation. The method is the point: calculate the peak funded balance and the peak unfunded landed-cost balance on the same timeline.
What has to be paid before the stock can be sold?
Customs duty, import GST, the customs broker's fee, terminal access and port charges, and any storage or detention all fall due before the stock can be sold, and none of them wait for the sale. Duty and import GST are the ones importers expect. The port and terminal charges are the ones that surprise them, partly because they arrive on a transport operator's invoice rather than from the terminal, and partly because the freight industry publishes them in detail while almost nobody connects them to how the shipment is funded.
The figures below are the published Australian source figures, each with its basis and its as-of date attached. They describe the market, not your shipment.
The report is also explicit about who ends up carrying the landside charge, and it is worth quoting the chain rather than paraphrasing it. Transport operators must visit the stevedore the shipping line nominates, so they have no ability to negotiate or influence the stevedore's landside charges. Transport operators are hired by cargo owners. Transport operators typically pass those fees on to cargo owners. On an import, the cargo owner is you, which is why the charge lands on your transport or broker invoice and why it belongs in the funding conversation rather than in a footnote.
What can actually be deferred, and in what order
Two separate deferrals exist, they are run by two different agencies, and one is a precondition for the other. The Australian Taxation Office operates the deferred GST scheme, which moves import GST to the first activity statement lodged after the goods are imported. The Australian Border Force separately operates Duty Deferral Plus for Australian Trusted Traders, which moves duty and several other charges into a consolidated monthly payment. Most published guidance covers the first and never mentions the second, which is why importers routinely believe duty can never be deferred.
The Border Force states that Duty Deferral Plus allows Trusted Traders who defer GST to defer the payment of duty and other taxes and charges to a consolidated monthly payment, paid on the 21st day of the month following the month in which the goods are imported, so that duty on goods imported in March is debited on 21 April or the next bank working day. The charges it names as deferrable are customs duty, anti-dumping and countervailing duty, wine equalisation tax, luxury car tax, the Import Processing Charge, the Wood Levy, and Department of Agriculture, Fisheries and Forestry processing charges for full import declarations. It also states that the benefit is available to Trusted Trader importers who defer GST through the Australian Taxation Office scheme, that some charges continue to be paid at the time of import including any fee for service charges, and that it is not available on excise equivalent goods or excise equivalent customs duties. Read on the Border Force page covering Trusted Trader duty deferral, page last updated 22 September 2024 and read 7 September 2026.
One operational detail is worth knowing before you build a cashflow around it. The Border Force states that declarations with duty deferred in the previous month are locked down between the 16th and the 21st of the month the payment is due, that they cannot be accessed for amendment or withdrawal during that window, and that this may cause delays in the release of cargo where the data was not reported correctly.
The order is the whole point. GST deferral comes first, from the Australian Taxation Office. Duty deferral sits on top of it, from the Border Force, and requires Trusted Trader accreditation as well. Neither is something a funder can switch on for you, and neither arrives in time for a shipment already on the water, which is why they belong in the same conversation as the facility rather than after it.
What happens if the container sits
Two separate clocks start when the vessel arrives, and importers routinely treat them as one. Terminal storage accrues at the terminal once the free time on that container expires, and it is charged by the terminal operator. Container detention accrues to the shipping line for as long as you hold its equipment, and it keeps running after the container has left the terminal and is sitting at your yard waiting to be unpacked. The two have different free periods, different daily rates and different start events, so a container can be clear of one clock and deep into the other.
There is a per-day figure circulating on this topic and it is not reproduced here, because it comes from logistics-company marketing rather than from a published tariff and it does not match any particular terminal. Read your own terminal's published schedule instead. Terminal operators and port managers publish these first hand: DP World Australia issues a landside charges notice for its Melbourne terminal, currently the 2026 final notice, and the Port of Melbourne publishes a Reference Tariff Schedule for the port's own prescribed services, with the 2026-27 schedule applying from 1 July 2026. Both were confirmed current on 7 September 2026. Your own terminal and shipping line will have equivalents, and those are the numbers to budget against.
The practical consequence for funding is simple. Every day a container sits while finance is arranged adds cost to a shipment whose price was fixed months earlier, which is why the finance conversation belongs at order stage and not at arrival. The Port of Melbourne container cashflow map walks through where the pressure points fall, and operators running their own transport will find the same timing problem from the fleet side in the truckie hub.
Can a sole trader with an ABN and no property get trade finance?
Yes, some trade and import finance facilities can be available to sole traders and can be structured without property security. Eligibility still depends on the financier, trading history, transaction, repayment source and security structure. Being a sole trader is not by itself the same thing as being ineligible, and the absence of property changes the lender field and the preparation required rather than creating a universal bar.
This question deserves a careful answer because the published material currently contradicts itself. One widely surfaced answer states that an Australian Company Number is required. Another states that a sole trader with an ABN qualifies. Both are describing something real, and the primary source resolves it in about two minutes. The Australian Company Number requirement belongs to Export Finance Australia's eligibility criteria for its own export products, not to the Australian import finance market. The agency's published criteria say "Must be an Australian registered company. An Australian Company Number (ACN) is required", alongside a requirement that the loan finance an export-related transaction, annual revenue of over $250K last financial year, and management and trading history of at least 2 years. Read on the agency's key eligibility criteria page, 7 September 2026. That is a government export lender describing who may use its own products. It is a correct statement about that lender and it says nothing about who can fund an import.
The same agency is useful evidence on the property question, in the opposite direction. Its Small Business Export Loan is described as being for businesses that need to borrow $20K to $350K, and the agency states plainly that it does not require property security and is secured only by director guarantee. Read on the small business page, 7 September 2026. It is an export product, so it is not the facility an importer is asking for, but it is a clear published example of an Australian lender advancing against a transaction and a guarantee rather than against a house.
| What it is | How much weight it usually carries | What you can do about it |
|---|---|---|
| Business structure | Low. Sole trader, partnership, trust and company all appear on funded import files | Do not restructure for a facility alone. If there are other reasons to, take them to your accountant |
| Trading history | High. How long you have traded, and how long in this class of goods | Show the history you actually have, including trading under an earlier entity where it is genuinely yours |
| Turnover | Moderate, and always read alongside margin rather than on its own | Bring the figures together with the bank statements that support them |
| The transaction itself | Highest. What the goods are, what they cost, who is selling them and who buys them from you | Bring the purchase order, the pro forma invoice, the freight quote and the broker estimate |
| The end customer | High where the stock is pre-sold, lower where you are buying to hold | Name the customer and show the order. Pre-sold stock is a materially easier file |
| Security offered | Varies by structure. Stock, debtors, PPSR security, a general security deed and a director or personal guarantee can all matter | Ask what is actually being taken, over what, what is registered on the PPSR, and for how long |
| Property | Not a universal prerequisite. Some products use it and some do not | If no property is offered, ask what business-asset security and guarantees replace it and which lenders remain available |
| Personal financial standing | Moderate, because a director or proprietor guarantee is common on these facilities | Know what your own file says before a credit team reads it back to you |
| Sole trader home lending, a different search | Not assessed here at all. Borrowing to buy a home while self-employed is a separate product on a separate assessment | Start from the sole trader business facility guide, not this page |
If no property security is required, what security can the lender still take?
“No property security required” does not mean unsecured. Depending on the lender and structure, security can still include imported stock or other goods, receivables, an All-PAAP or other PPSR registration supported by a general security deed, and a director or personal guarantee. The PPSR describes All-PAAP as all present and after-acquired personal property and notes that businesses often grant it to their main financier under a general security deed. ASIC also warns that lenders and trade suppliers often require personal guarantees and that a director who gives one can become personally responsible if the company cannot repay.
Read the security documents rather than the marketing headline. A facility can avoid a mortgage over real property and still give the financier rights over the business's stock, debts or broader personal property. If another lender already finances the debtor book or holds an All-PAAP registration, priority and consent need to be checked before a second financier assumes the same assets are available. The primary references are the PPSR collateral class guidance, the PPSR explanation of security interests and ASIC's director guidance on personal guarantees.
Can I get trade finance for my first import shipment?
Potentially, yes: a first direct import is not the same thing as a brand-new business. An established Australian business importing the same class of products it already sells can still show trading history, margins, bank conduct and customer demand even though it cannot show a completed import cycle. What the lender loses is transaction history with the overseas supplier and evidence of the actual landed cost and sell-through from earlier shipments, so the first file usually needs more documentary support.
Pre-sold stock is easier to explain because the repayment source is already named; stock bought to hold has to be supported by the business's existing sales history and margin. A smaller first order can also make the proposed cycle easier to prove before the business asks a lender to support a larger repeat limit. These are credit considerations, not Australian statutory eligibility rules, and individual lenders can still apply their own minimum trading-history, turnover or security policies.
Get the customs broker before the finance is finalised, because the broker's estimate is the document that makes the rest of your landed cost real. A funder can size a facility against a purchase order and a broker estimate. It cannot reliably size one against a purchase order and an assumption about duty, because duty depends on classification and origin rather than on the product name alone.
Three things are worth understanding before the first container is booked, and none of them is a finance question, which is exactly why they get missed by someone whose search started at trade finance.
- The liability is yours. The customs broker lodges the entry and the forwarder moves the box, but the duty and import GST are payable by the importer. Outsourcing the paperwork does not outsource the debt.
- Your GST registration decides whether the GST at the border is a cost or a timing problem. Import GST is paid at the border, and a registered business recovers it through its activity statement. That makes it a cashflow gap rather than a cost, but only if you are registered and only once the statement is lodged.
- Deferral is arranged with the Australian Taxation Office, in advance. The deferred scheme applies to approved importers, so it is something to organise before a shipment rather than during one. No funder can switch it on for you while a container is on the water.
The practical sequence for a first import, then, is: classify the goods with a broker and get a written duty and GST estimate, build the landed cost from that, and only then ask for a facility against the total. Doing it in that order costs a week at the front and saves the situation where the money arranged covers the supplier and nothing else. What changes on the second and third shipment is mostly evidence rather than product: you now have a landed cost you actually incurred, a supplier you have paid and been shipped by, and a sell-through record for the same class of goods, which is the material that makes a larger facility a shorter conversation.
What we searched for and did not find
We went looking for an Australian published minimum, and we did not find one. No Australian government body or industry body we checked publishes a minimum trading history, a minimum turnover, or a required business structure for import or supplier finance. The bodies checked were the Australian Securities and Investments Commission, the Australian Taxation Office, business.gov.au, the Australian Small Business and Family Enterprise Ombudsman, and the Reserve Bank of Australia.
That matters because figures on this question circulate widely and are repeated as though they were rules. Every one we traced came from a lender or a broker publishing its own credit appetite. A single funder's own floor is a real thing, and it is worth knowing when you are talking to that funder, but it is not a standard and it does not describe the market. When you next read a minimum trading period or a minimum monthly revenue for import funding, the useful question is whose number it is. We have not printed any of them here for that reason.
The practical version of the same point: the file that gets funded is the one where the transaction is documented and the trading history is legible, and there is no published threshold you can check yourself against in advance. If a facility is declined, the reason is almost always in the transaction or the conduct rather than in the letters after the business name, which is also the pattern in the sole trader decline guide.
From our broking, indicative and qualitative
In practice, what separates an import file that gets funded from one that stalls is rarely the borrower's structure.
- On files we place, the importers who move fastest are the ones who arrive with the purchase order, the freight quote and the customs broker estimate already together, because the facility can then be sized against a real landed cost rather than a supplier invoice and a guess.
- What we see stall most often is a deposit request with nothing behind it yet: no order, no named end customer, and a supplier the business has not dealt with before.
- Where a sole trader is knocked back, the reason recorded on the file is usually the transaction or the trading history, not the absence of a company.
- The importers who get caught short are the ones who budgeted for the supplier invoice and not for the duty, the import GST and the terminal charges that all fall due before a single unit has sold.
- Property is not the only security conversation. Where no mortgage over property is taken, we still expect the term sheet to spell out any PPSR security over business assets and any director or personal guarantee rather than treating “no property security” as “unsecured”.
Indicative and qualitative only, drawn from files we have placed. No figures are given here, because no figure we could publish would be a quote or an offer, and actual outcomes depend on lender policy, the transaction and your own circumstances at the time of application. Not financial advice.
What does trade finance cost in Australia?
There is no single published Australian market rate for trade finance. Total cost is normally built from the interest or discount while funds are drawn plus any facility, drawdown, foreign-exchange, documentation, extension, default or exit charges. Compare the total dollar cost from supplier payment to repayment, not the headline rate alone, because two facilities with different fee structures can reverse order once a full shipment cycle is priced.
The reason there is no rate card is that the price is assembled per transaction rather than per borrower. What moves it: the goods and how readily they resell, the supplier and whether the funder can verify them, how long the money is out for, what security is taken, your trading history in that class of goods, and whether the stock is already sold. Two importers with identical turnover can be priced differently on the same day because one has a named end customer and the other is buying to hold.
Two figures are in circulation on Australian pages and they do not agree with each other. One is quoted as a percentage per annum on the drawn balance. The other is quoted as a percentage per quarter, which is roughly double the first once annualised. Neither carries a source, and the pages carrying them are marketing pages rather than published data. So we went looking for a primary source, and checked whether any Australian body publishes anything on the cost of transactional trade or import finance to small business: the Reserve Bank of Australia, the Australian Bureau of Statistics, the Australian Securities and Investments Commission, the Australian Banking Association, the Australian Finance Industry Association and the Australian Small Business and Family Enterprise Ombudsman. None of them publishes a cost figure for this product. Every number we could trace came from a lender or a broker describing its own appetite. That does not make either figure dishonest. It makes both of them one funder's position rather than a market rate, and it is the reason no figure appears on this page.
That makes the useful preparation a checklist rather than a comparison. The table below is every line that can appear in the cost of an import facility, how it is usually charged, and the question to put in writing before you accept anything. It carries no figures, and it is deliberately the same discipline as the landed cost method above: compare in dollars across one full cycle, from supplier payment to repayment, not on a rate. A facility with a lower headline number and a fee on every drawdown can cost more over one shipment than a facility with a higher one and no drawdown fee.
| Cost line | How it is usually charged | The question to ask before you sign |
|---|---|---|
| Establishment or facility fee | Once at the start, and sometimes again at each renewal or review | Is it charged on the limit or on what I actually draw, and is it charged again on renewal |
| Drawdown or transaction fee | Per drawing, or per shipment | Is it a flat amount or a percentage, and does a part shipment count as two drawings |
| Interest or discount charge | Over the days the money is out | Does the clock start when my supplier is paid or when the goods ship, and what is the daily basis |
| Tenor and extension | An agreed number of days to repay, set at the start, and usually talked about in 30, 60, 90 or 120 day terms | What happens if the stock has not sold by that date, is an extension available, and what does it cost |
| Currency conversion | Built into the rate used to pay the supplier, rather than shown as a fee | What margin sits over the market rate, and may I compare it against a separate provider |
| Security and documentation costs | Registration, legal and valuation costs where security is taken | Which are payable upfront, and which fall again at discharge or exit |
| Default and overdue charges | On late repayment, a limit breach or another event of default | What events trigger them, at what rate, and how much notice do I get |
| What it costs to leave | Early repayment, discharge, or unwinding security | If this shipment goes well and I want to stop, what does exiting cost me |
If the transaction also uses a letter of credit or documentary collection, add the bank's trade-service fees to the comparison rather than treating them as part of the interest rate. One major Australian bank's published business fee schedule, for example, separately lists establishment and handling charges for outward letters of credit and charges for inward documentary collections. That is one bank's schedule, not an Australian market price, but it shows why an LC or collection comparison has to include bank-service charges as well as the cost of any financing behind it. Ask your own bank for its current business fees and charges schedule in writing before the credit is opened.
One point on the last row, because it rarely gets asked. Import facilities are often written to keep running past the shipment that prompted them, and a facility that is easy to enter and expensive to leave is a different proposition from one sized to a single transaction. Business lending sits outside the consumer credit protections, so the terms are what you negotiate and sign, and the exit is part of the terms.
How long does trade finance take to arrange in Australia?
There is no reliable published Australian market-wide approval time for a new trade finance facility. Do not confuse three different clocks: the time to assess and document a facility, the facility tenor such as 30, 60, 90 or 120 days, and the full import cash cycle from supplier deposit to customer payment. A new facility can take longer where supplier verification, security, legal work or valuation is required; a drawdown under an already approved limit is a different process.
Start before the order or deposit deadline, not when the container lands. Once storage or detention is running, every assessment day has a cash cost. The sequence below is more useful than a made-up market average because it shows exactly where a file can be shortened and where it cannot.
- Scoping. What the goods are, what they cost to land, when the supplier needs paying and where the repayment comes from. Fast, if you have already run the landed cost method above. Slow, if the answer to any of those is an estimate.
- Assembling the file. Purchase order or pro forma invoice, freight and insurance quote, customs broker estimate, recent business bank statements, and evidence of who buys the stock from you. This is where the days go, and it is the part entirely within your control.
- Assessment. The funder reads the transaction and the trading history. Incomplete files do not queue, they restart, so a document produced on day six can cost more than six days.
- Offer and documents. Facility terms, security documents and any guarantee. Where a general security agreement or property security is involved, add the time that registration, legal review and valuation take.
- Drawdown to the supplier. The funder usually pays the supplier directly, which means supplier bank details have to be verified before money moves. That verification step surprises importers who expected same-day payment, and it exists precisely because supplier payment fraud is common.
Two things shorten the whole thing more than anything else: a complete file on day one, and starting at order stage. Nothing else you can control moves it much. If the container has already landed and the clocks are running, the realistic move is not to speed up the facility but to separate what has to be paid to release the box from the slower working capital piece, which is the sequence scenario two above sets out.
Is this trade finance, purchase order finance, inventory finance, invoice finance or working capital?
The right product changes as the same goods move through the cash cycle. Purchase order finance can become relevant where a confirmed customer order is the transaction being funded; trade or import finance sits around paying the overseas supplier and getting the goods into Australia; inventory or stock finance belongs to landed stock being held before sale; invoice finance begins once an eligible customer invoice exists; and a business line of credit or working-capital loan is broader funding tied to neither one shipment nor one invoice.
The names overlap across lenders, so use the event rather than the label. Ask what has already happened: has the customer placed an order, has the supplier been paid, have the goods landed, has the stock sold, or has an invoice been issued? That point in the cycle usually tells you which asset or transaction the financier can actually underwrite.
| Stage | Likely finance discussion | What supports it | What normally repays or releases it | When it is the wrong lane |
|---|---|---|---|---|
| Confirmed Australian customer order before stock is bought | Purchase order finance or trade finance, depending on structure | The customer order, supplier purchase order, margin and ability to complete delivery | Customer payment after delivery | No confirmed order and the business is buying general stock |
| Supplier deposit or balance due before shipment | Trade / import finance | Supplier documents, landed cost, trading history and repayment source | Sale of the imported stock, under the facility terms | The goods have already been sold and invoiced |
| Goods are manufactured or on the water | Trade finance remains the main transaction facility | Underlying trade documents and progress of the shipment | Sale proceeds when stock lands and sells | The problem is a customs hold or documentation issue that finance cannot cure |
| Goods have landed and are deliberately held as stock | Inventory / stock finance may become relevant | Eligible stock, turnover, controls and a believable sell-through cycle | Stock sales | Stock is obsolete or not selling; more leverage does not repair demand |
| Customer has been invoiced but has not paid | Invoice finance | An eligible receivable against an acceptable customer | Customer payment of the invoice | No invoice exists yet or the receivable is ineligible |
| Cash gap runs across the whole business rather than one transaction | Business line of credit or working-capital loan | Overall business cashflow, conduct and available security | General business cashflow under the agreed repayment structure | The need can be tied cleanly to a cheaper or better-matched transaction facility |
The payment method is a separate layer. A letter of credit or documentary collection can sit alongside a funding product because it governs how documents and payment move; the payment-versus-funding table above shows that distinction. A customer can therefore have an LC for supplier assurance and an import-finance line for reimbursement, or trade finance before sale and invoice finance after the customer invoice exists, subject to each financier's documents and security position.
What happens if trade finance matures before the stock has generated enough cash?
Do not assume the drawing automatically rolls over. Some Australian banks have documented processes for requesting an extension or rollover, and some allow partial repayment, but the original maturity remains the contractual date unless the lender approves a change. Published Australian bank documents set out an online process for requesting a rollover, including an example instruction asking for an additional 30 days; a request form providing for a drawing to be rolled to a new maturity, for a partial payment, and for the remaining balance to be rolled, which states that rollover beyond the maximum approved tenor requires commercial reasons and remains subject to approval; and standard trade terms under which a customer may apply to roll over all or part of an existing trade finance loan on its maturity date.
Those are documented processes of individual banks, not a market-wide promise that every financier will extend every transaction. The lender will look at why the cycle moved, where the goods are now, what cash has already been generated, whether the underlying transaction remains sound, whether the revised date still fits its approved tenor and whether additional conditions, fees or security are required. Raise it before maturity, with evidence of the revised shipment, clearance, sale or customer-payment dates.
Those descriptions are drawn from three current Australian bank documents read on 8 September 2026: a trade finance loan extension guide, a trade advance request form and a set of published trade terms. They are evidence that extension and partial-repayment processes exist. They are not terms that apply automatically to any other lender, and the facility documents that govern you are your own.
If the stock has landed and it is selling slower than you planned
Tell the funder before the repayment date, not after it. A trade facility falls due on an agreed date, not on your sell-through, so slow stock turns a trading problem into a repayment problem on a fixed calendar. Raised early, it can become a request for an extension, a partial repayment or a different structure; raised after maturity, the borrower is relying on whatever overdue and default provisions were signed at the start.
Work out which of three problems you actually have, because they have different answers. If the stock is sold but the customers have not paid, that is a receivables problem and invoice finance rather than more trade funding is usually the direct answer. If the stock is moving but slower than the tenor assumed, the facility was sized on the wrong cycle and the fix is structural rather than urgent. If the stock is not moving at all, no funding structure repairs that, and the decision is a pricing and clearance decision rather than a finance one.
The one move to avoid is the one that looks like a solution: funding the next order's deposit while the last shipment is still unsold. That is the pattern the stall column above describes as a deposit quietly covering a shortfall from an earlier shipment, and it is visible to a funder in the bank statements long before it is visible in the accounts. The stock holding trap explainer covers what happens when the stock cycle is slower than the funding assumed.
If you already have an invoice finance facility
An existing invoice finance facility and an import facility can sit together, but do not assume the security can. Check what the existing financier already holds before a second lender is asked to take stock, receivables or a general security interest. An All-PAAP registration can cover present and future personal property, and priority between competing security interests is a legal and documentation issue rather than something the product names resolve. The existing financier's consent, priority arrangements and facility documents may therefore need to be checked before the second facility is established.
The other effect is on your limit rather than your security. Imported stock that has not yet been sold generates no invoices, so it does not create availability under a debtor facility; availability arrives only after the goods are sold and invoiced. That is precisely the gap import funding fills, and the two facilities are complementary for exactly that reason. The Perth importer case study shows the two running alongside each other.
If you import the same stock repeatedly, do you need a new application for every shipment?
Not necessarily. Some import facilities are transaction-specific, while others operate as an approved revolving or reusable limit with each shipment treated as a drawdown subject to the facility's conditions. The questions to ask are whether the limit restores after repayment, whether each supplier or product must be re-approved, what documents are required for each draw, and when the whole facility is reviewed or renewed.
For a repeat importer, the more important number is the peak overlapping cash gap, not the cost of one shipment. If order two needs its deposit while order one is still on the water or sitting in stock, a facility sized to one supplier invoice can be fully utilised at exactly the moment the next profitable order appears. The two-order worked example above shows why a $100,000 supplier invoice can require a materially larger repeat limit once the next order overlaps. Map at least two cycles before choosing the limit, and leave room for FX movement, border charges and customers paying later than expected.
Trade finance answers a timing and funding problem around an import transaction; payment instruments answer a different part of the job. The file becomes legible when the transaction, the full landed cost, the repayment source and the security position are all documented. A promise to fund “100%” has to be translated into exactly which cost lines are inside the limit, and a repeat importer has to size to the peak overlap across live shipments rather than to one invoice. Duty, import GST and terminal charges can all create cash demands before a unit sells. If the cycle then runs late, rollover or partial repayment may be requestable under some lender processes but is not automatic, and once the stock is sold the next funding problem may be the receivable rather than the import.
Key takeaway: map the whole cash cycle before the order is locked: supplier payment, landed costs, overlapping shipments, repayment date and the next finance stage, then ask which lines and which assets the facility actually covers.Frequently Asked Questions
A trade finance facility pays your overseas supplier so the goods can be produced and shipped, and you clear the facility once the stock has sold. In sequence: you issue a purchase order, the facility pays the supplier against agreed documents, the goods ship and land, you pay duty and import GST and take delivery, you sell, and the proceeds repay the facility. The facility is sized on the transaction and the trading cycle rather than on an asset you keep, which is what separates it from equipment finance.
Import finance is the same funding described from the buyer side: money that covers the cost of bringing goods into Australia before those goods generate any revenue. In Australian usage it covers supplier deposits, the balance due before shipment or on documents, and in some structures the duty, import GST and port charges that fall due at the border. If the goods are a machine you will keep and use rather than resell, the right lane is the imported equipment guide instead.
Usually yes, in the sense that it creates a debt you repay, but the structure varies and the label matters less than the mechanics. Some facilities are a drawn loan, some are a revolving limit you redraw as stock cycles, and some are a payment made directly to your supplier that you clear on agreed terms. What you should establish in every case is what triggers repayment, what security is being taken, and whether a director guarantee is required. The working capital definition is a useful starting point for the difference between a facility and a term debt.
It carries the risks of any business borrowing, plus two that are specific to importing: the goods may not sell as planned, and costs can land before revenue does. The second is the one importers underestimate, because duty, import GST and terminal charges fall due whether or not a single unit has been sold. Business lending also sits outside the consumer credit protections, so the terms are what you negotiate and sign. Reading the supplier deposit risk explainer before you commit a deposit is a sensible first step.
Potentially. A first direct import does not erase an established Australian trading history. A lender can still assess how long you have traded, bank conduct, margins, the overseas supplier, the full landed cost and who is expected to buy the stock. Pre-sold stock or confirmed customer orders can make the repayment source easier to evidence. Individual lenders can still apply their own minimum trading-history, turnover and security rules, so a product-specific floor should not be presented as an Australian market rule.
An import letter of credit is a bank undertaking to pay the overseas supplier when the required documents comply with the credit terms. The bank checks documents, not the physical goods. It uses the importer's credit with the issuing bank, so a standard LC does not automatically create a new source of cash; however deferred-payment, usance and revolving structures can add a financing or repeat-transaction element. Ask whether the problem is supplier assurance, funding, or both.
Some lenders have documented processes for requesting an extension or rollover, but it is not automatic. Published Australian bank documents set out processes for requesting an additional period, for rolling a drawing to a new maturity, and for rollovers beyond the approved tenor, which require commercial reasons and the lender's approval. Your own lender's facility terms and approval still control the outcome.
Some facilities allow it. A published Australian bank request form expressly provides for a partial payment with the remaining balance rolled to a new maturity, subject to the lender's approval where required. Other lenders can have different mechanics. Ask before maturity whether partial repayment is permitted, how interest and fees are recalculated, whether the remaining balance can be extended and what happens if the request is declined.
Customs duty is payable before the goods are released from customs control, according to the Australian Border Force. Import GST normally falls at the same point, because the GST Act requires the importer to pay GST at the same time and in the same manner as customs duty. The deferred GST scheme moves the GST to the first activity statement lodged after the goods are imported for approved importers. Duty itself is deferred separately and only under the Border Force Trusted Trader duty deferral benefit, which is open to importers already deferring GST and consolidates duty into a single payment on the 21st day of the month following importation.
The cargo owner ends up paying, which on an import is the importer. The ACCC container stevedoring monitoring report describes the chain plainly: transport operators must visit the stevedore the shipping line nominates and so have no ability to negotiate the landside charge, they are hired by cargo owners, and they typically pass those fees on to cargo owners. Practically, the charge reaches you on your transport operator or customs broker invoice rather than from the terminal directly, which is why it is easy to leave out of a landed cost estimate.
Yes, some trade and import finance facilities can pay an agreed supplier deposit as part of the funded transaction. The lender will usually want the purchase order or pro forma invoice, supplier details, the payment milestones, the full landed-cost budget and a clear repayment source. A deposit is easier to assess when it starts a documented order; it is harder when the amount is unsupported or is really covering a shortfall from an earlier shipment.
Not always. Some facilities are approved for one transaction, while others provide a reusable or revolving limit and treat each shipment as a new drawdown under that approval. Ask whether the limit restores after repayment, whether each supplier or product needs approval, what documents are required for every draw and when the facility is reviewed. If orders overlap, size the limit to the peak cash gap across more than one shipment rather than to a single supplier invoice.
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