Key takeaways

• The gap: Importers commonly hand over a deposit at order and the balance before shipment, then wait through sea freight, sell-through, and customer payment terms before a dollar comes back.
• How long it runs: Deposit to collected revenue is often 90 to 150 days, and longer when big customers pay slowly. The slowest large-business payments have stretched to 64 days.
• Why growth makes it worse: Every bigger order demands more cash upfront while the last order is still unsold, so the more successful you are, the tighter cash gets.
• What closes it: Trade finance pays the supplier for you and is repaid as stock sells, converting the gap from a cash problem into a funding cost you can price into your margin.
• What to check first: Repayment windows, fees, and currency timing vary by lender, which your broker works through with you before you commit.

There is a strange punishment built into importing: the better your product sells, the worse your bank balance looks. Every order means money out the door months before any comes back, and growth means bigger orders, sooner, stacked on top of each other. Plenty of profitable importers hit a wall not because demand fell but because the cash gap swallowed their working capital. This article maps that gap and shows how trade finance closes it.

Anatomy of the gap

Walk through a single order and the problem draws itself. Most overseas factories want a deposit, commonly around 30%, when you confirm the order. Production runs four to eight weeks, then the balance is due before the goods ship. Sea freight to Australia adds three to six weeks depending on the route. The stock then has to land, clear, and sell through, which for many lines takes another two to three months. If you sell to other businesses, your invoices then sit on their payment terms.

The Payment Times Reporting Regulator reported that the average time for a large business to pay 95% of its small suppliers blew out to 64 days in the latest cycle, up from 58: the slowest payments are getting slower. Add that to the front of the cycle and an importer can easily fund an order for five months before collecting on it. The exposure is national: Australian businesses imported $629.9 billion in goods and services in 2024-25, per the Australian Bureau of Statistics, and a large share of that was paid for before it earned anything.

Why growth tightens the squeeze

A stable importer eventually finds a rhythm: this month's sales fund next month's order. Growth breaks that rhythm. To grow 40%, your next order must be 40% bigger, and its deposit falls due while the current order is still on the water. The cash demand of the next cycle always arrives before the revenue of the last one, and it shows up in familiar ways:

• Rationed ordering: You order what your bank balance allows rather than what your customers would buy, and walk away from demand you worked hard to create.
• Missed volume pricing: Factories reward bigger orders with better unit prices, and cash-capped importers cannot reach the tiers their volume justifies.
• Stockouts in peak season: The order that should have been placed in winter was not, because the cash was still tied up, and the shelf is empty in summer.
• Everything else gets starved: Wages, marketing, and new lines all compete with the next deposit for the same dollars.

None of this is mismanagement. It is the arithmetic of paying at order and collecting after sale, and discipline does not change arithmetic. What changes it is putting a facility between you and the supplier payment.

How trade finance closes the gap

A trade finance facility pays your overseas supplier directly, at deposit and at balance, as a drawdown against an approved limit. You repay each drawdown as the stock lands and sells, and the facility resets for the next order. The cash gap does not disappear, but it stops being funded by your bank account and starts being funded by a lender whose business is carrying exactly this kind of timing risk. Your cost is interest and fees for the months each drawdown is outstanding; your gain is every order you can now place that cash used to forbid. For most growing importers the margin on the extra orders comfortably outruns the funding cost, which is the honest test of whether the facility earns its place.

Before you commit, there are real details a broker will walk you through so nothing surprises you later. Repayment windows on each drawdown are finite and need to match your genuine sell-through time, not your optimistic one. Fees come in parts: interest on drawn funds, an establishment fee, and transaction costs for international payment and currency conversion. Exchange rates change between deposit and balance payments, and how that risk is handled is worth settling upfront. And if a shipment is delayed or arrives with problems, you want to know in advance how the facility responds. These are the fine-print points where facilities differ most, and comparing them across specialist lenders is precisely the job you hand to a broker rather than absorb yourself mid-shipment.

A realistic scenario

Take a Brisbane outdoor equipment importer heading into its peak. Summer stock has to be ordered in June and July, which is exactly when the business is at its cash low point after a quiet autumn. Last year the owner ordered half of what retailers wanted because that was all the cash allowed, then watched competitors fill the gap through December.

This year, a trade finance facility arranged in autumn pays the factory's deposit and balance across three staggered orders. The facility is sized so the orders overlap, the repayment window on each drawdown runs long enough to cover the pre-Christmas sell-through, and the stock itself stands as the main security. Drawdowns are repaid through January as retailers settle their invoices, and the limit resets ahead of the winter buying cycle. The owner's broker structured it alongside inventory finance so both the supplier payments and the stock holding period were covered under one plan, with working capital finance considered for the general timing gaps that sit outside the import cycle.

What matters most

The import cash gap is structural, and growth widens it. Left to your bank balance, it caps your ordering at whatever cash happens to be free, which is why strong demand so often coexists with a strangled importer. Trade finance shifts the supplier payment onto a lender and repays it from the stock's own sales, turning a hard cash ceiling into a funding cost you can price into your margin. The structure has to fit your real cycle, and the fine print differs lender to lender, so let your broker carry the comparison while you carry the orders.

This article is general information only and does not take your circumstances into account. Consider your own situation, and seek advice where needed, before acting on it.

Sick of your supplier payments deciding how fast you can grow? Get a quote on trade and inventory finance here.