Import financing pays your overseas supplier before your goods arrive and sell; export financing covers production costs and foreign receivables while you wait for a buyer abroad to pay. Importers usually rely on private options such as purchase order financing, supplier-payment programs and letters of credit, while exporters can also use SBA and Export-Import Bank (EXIM) programs that back loans from private lenders. Both sit within our wholesale financing guide.
Trade is mostly a small-business activity. The Census Bureau counted 239,231 identified U.S. importers and 270,001 identified exporters in 2024, and “SME exporters accounted for over 97 percent of the identified exporters” (U.S. Census Bureau). Census counts a company with fewer than 500 employees as a small or medium enterprise.
Why trade creates a cash gap
The gap depends on the payment terms you agree with your trading partner. The International Trade Administration (ITA) describes the main methods (trade.gov):
- Cash in advance. The buyer pays before goods ship. Safest for the seller, and the hardest on an importer’s cash.
- Letter of credit (LC). A bank commits to pay the seller once shipping documents are presented. ITA calls LCs “one of the most secure instruments available to international traders.”
- Documentary collection. The exporter’s bank collects payment through the buyer’s bank in exchange for the shipping documents.
- Open account. Goods ship and arrive before payment is due, “which in international sales is typically in 30, 60 or 90 days.” ITA calls it one of the most advantageous options to the importer “in terms of cash flow and cost.”
An importer paying cash in advance can have money tied up for the whole production run, ocean transit, customs clearance and the time it takes to sell the goods. An exporter selling on open account waits for a foreign customer to pay, often after weeks at sea. Financing fills whichever side of that gap you are on.
Import financing options
SBA and EXIM programs focus on exporters, so importers mostly use private trade finance. Figures checked on September 21, 2026, from each provider’s own pages; they are published ranges, not quotes.
| Option | How it works | Published example terms | Main trade-off |
|---|---|---|---|
| Purchase order financing | A funder pays your supplier to fill a confirmed customer order; you repay when your customer pays | 1st Commercial Credit: rates “From 1.5% to 5%”; “at least an initial $100,000 transaction minimum”; you must “retain a minimum of 25% profit”; at least one year in business | Needs a creditworthy end customer and enough margin to absorb the fee |
| Supplier payment (trade payable) financing | A funder pays your supplier on the due date and you repay later | 1st Commercial Credit: “Rates at 1.5% to 5%”; up to $10 million credit limit with a $100k minimum spend | Built for established, creditworthy buyers |
| Letter of credit through a trade funder | A funder issues or backs an LC to your overseas supplier | King Trade Capital lists “Letters of Credit for Domestic and International Production”; terms on request | Supplier must accept an LC; bank and document fees apply |
| Invoice factoring on U.S. sales | Once imported goods sell, you sell the invoices for cash | See our distributor factoring guide | Only helps after the sale; does not pay the supplier up front |
| Bank line of credit or asset-based line | Revolving credit against receivables and inventory | Set by each lender; see wholesale inventory financing | Imported inventory in transit may not count toward the borrowing base |
Sources: 1st Commercial Credit purchase order financing and trade payable financing; King Trade Capital.
These rates are fees quoted as a percentage of the transaction, not an annual percentage rate (APR), which states the cost of credit per year. The pages do not say what period the fee covers. That matters, because a PO deal on imported goods can run for months. Ask for a written quote showing the total fee if the goods take several months to ship, clear customs and get paid for. Some PO funders cover landed costs: 1st Commercial Credit says it “pays the supplier for goods, shipping, and applicable duty fees.” For more on how PO deals work, see purchase order financing.
PO funders are repaid from the sale. King Trade Capital describes being “typically taken out or repaid by a bank, factor, asset-based lender, letter of credit or direct repayment by the ultimate end customer,” and it provides financing “based upon firm valid purchase orders issued by creditworthy companies or governmental entities.” That is why PO financing and factoring are often paired; see combining PO financing and invoice factoring.
Export financing options
Exporters have access to government-backed programs. Neither the SBA nor EXIM usually lends to you directly; they guarantee loans made by participating lenders. As EXIM puts it, “EXIM doesn’t replace an exporter’s bank; it works with lenders to provide a loan guarantee that backs the borrower’s debt.”
| Program | Maximum | Government guarantee to the lender | Key terms as published |
|---|---|---|---|
| SBA Export Express | $500,000 | 90% for loans of $350,000 or less; 75% above that | Lender makes the credit decision; interest may not exceed the SBA maximum |
| SBA Export Working Capital Program | $5 million | 90% | Lines of 36 months or less; “no SBA maximum interest rate limit”; export inventory and foreign receivables generally count as collateral |
| SBA International Trade Loan | $5 million | 90% | Fixed assets, working capital and debt refinancing; SBA turnaround of 5–10 business days |
| EXIM Working Capital Loan Guarantee | “no minimum or maximum transaction amount” | 90% | Minimum U.S. content of 10%; funds materials, labor and finished goods for export orders |
Sources: SBA types of 7(a) loans, SBA export finance programs, EXIM Working Capital Loan Guarantee.
A few points worth knowing. Export Working Capital loans can be arranged “in advance of finalizing an export sale or contract,” and the SBA says turnaround is “usually five to 10 business days.” The International Trade Loan also covers businesses “adversely affected by import competition,” not only exporters, so a U.S. producer competing with imports may qualify. Interest on these loans is negotiated with the lender, which is also where you apply; our SBA loans page explains how the process works.
Export credit insurance and export factoring
Foreign receivables are often left out of a bank’s borrowing base; EXIM describes its working capital guarantee as allowing “inclusion of otherwise excluded collateral in borrowing base.” Credit insurance is the other tool. EXIM’s Multi-Buyer Small Business policy covers “both commercial and political risks at 95%,” with “no application fees or annual minimum premium” and a “one-time, refundable advance deposit of $500.” EXIM adds that “policy proceeds (claim payments) may be assigned to a financial institution to arrange receivables financing or to add insured foreign accounts receivable to the borrowing base” (EXIM).
Export factoring works like domestic factoring, but on foreign invoices. 1st Commercial Credit, for example, advertises funding of “up to 85% of the invoice value,” rates of 0.69% to 1.59% (period not stated), and “$150,000 Monthly Sales Required” (1st Commercial Credit). As with PO financing, the rate is a fee on the invoice value, not an APR. For large, longer-dated export receivables, forfaiting is another route; see factoring vs. forfaiting.
What lenders and funders look at
- The buyer’s credit. For PO financing and factoring, your customer’s ability to pay matters as much as yours.
- The supplier’s track record. King Trade Capital says it “funds transactions with suppliers/subcontractors and manufacturers that have a proven track record.”
- Your margin. Trade funders want enough gross profit to cover their fees and still leave you a return, which is why some publish a minimum margin.
- Documents. Purchase orders, pro forma invoices, supplier contracts, bills of lading, insurance certificates and, for exports, the foreign buyer’s credit information.
- U.S. content (exports). EXIM’s working capital guarantee has “a minimum U.S. content requirement of just 10%.”
Pitfalls to plan for
- Underestimating the timeline. Production delays, port congestion and customs holds stretch the financing period, and fees on many trade products grow with time.
- Forgetting landed costs. Freight, insurance, duties and brokerage fees all need funding. Confirm which of them your funder will pay.
- LC discrepancies. Banks pay against documents. A typo or late shipment date on a bill of lading can delay payment under a letter of credit.
- Currency swings. If you buy or sell in a foreign currency, a move in the exchange rate can erase your margin. Ask your bank about hedging.
- Stacked liens. PO funders, factors and banks each want a claim on the same goods and receivables. Line up who comes first before you sign.
FAQ
Can the SBA help me finance imports?
SBA export programs are built for exporters. The International Trade Loan also covers businesses “adversely affected by import competition.” An importer can still use a standard SBA 7(a) loan or line of credit for working capital if it qualifies, but most import deals use private PO or trade finance.
Does EXIM lend to small businesses directly?
For working capital, EXIM guarantees loans made by lenders rather than replacing your bank. You apply through a participating lender.
What is the difference between PO financing and a letter of credit?
A letter of credit is a bank’s promise to pay your supplier when set documents are presented. PO financing is a funder paying your supplier for a specific customer order, which can include issuing an LC. Many deals use both.
How fast is SBA export financing?
With Export Express, the lender makes the decision. For the Export Working Capital Program, the SBA says turnaround is usually five to 10 business days. Allow extra time for the lender’s own review.
Next step
Map one typical shipment from deposit to final customer payment, with dates and amounts, before you ask for terms. With that timeline, our wholesale financing page explains how we compare PO, factoring and credit offers from the lending partners we work with.
Sources
- U.S. Census Bureau: Preliminary Profile of U.S. Importing and Exporting Companies, 2024
- International Trade Administration: Methods of payment
- SBA: Types of 7(a) loans
- SBA: Export finance programs
- EXIM: Working Capital Loan Guarantee
- EXIM: Multi-Buyer Small Business Insurance
- 1st Commercial Credit: Purchase order financing
- 1st Commercial Credit: Trade payable financing
- 1st Commercial Credit: Export and import finance factoring
- King Trade Capital: Services
About this page. Written by Ezra Cabrera, Content Team Lead at SMB Compass. Figures were checked against the primary sources listed above on September 21, 2026; lenders change their terms, so confirm current terms before you apply, and let us know if you spot a figure that has changed. SMB Compass is a business financing broker: we don’t lend our own money, and we are paid by the lenders we place loans with. This page is general information, not financial, legal or tax advice.