business, finance, money, personal

Financing An Import / Export Business

I think the best way to finance an import / export business is to establish a line of credit with your vendor / supplier. Once you have proof of concept by showing cashflow, it should be easier to either increase your credit line, pull in angel investors or get listed. You might want to consider the SGX or BSE, because you don’t need as high of a market cap to get listed in their dollars. Later when you get big, you can use the NASDAQ.

The main thing your vendor / supplier will want is to meet with you and determine if you are financially stable enough to open a credit line. If you don’t already have an existing company with a bunch of suits to impress them, try letting them pull your credit (if its 730+) and provide a personal financial statement to show that you aren’t going to disappear (you must show assets like a nice house). If you don’t have a 730+, I may have a couple of good suggestions.

Note: In this economy it’s still beneficial to go public. Many entreprenuers think they should wait until the market improves. However, it will look better to investors if the company starts when the market is at rock bottom and then grows substantially as the economy recovers. Plus going public with a small percentage of your stock offers a lot of advantages, which includes money for advertising, expansion and eliminating debt financing. If you want to find out what your company is potentially worth, the following formula works in most situations. Take your company’s Net Annual Income multiply it by ten years and then multiply it by the average price to earnings ratio for your industry segment. This can be done by selecting three to five similar companies and then taking the average of their individual P/E ratios. Hope this article was helpful. Feel free to contact me if you want to go public.