Receivable Financing and Purchase Order Financing for Tea & Coffee Importers.
The growth in US consumer Tea consumption has been significant the last 14 years. The USDA estimates that Tea imported into the US has grown from 152,000 metric tons in 1999 to 201,000 metric tons in 2012. Very little tea is produced in the US, and the vast majority must be imported. Imports of tea, coffee, coffee beans and spices are subject to review by the Food and Drug Administration (FDA). All commercial imports of food products require the filing of Prior Notice with FDA, and foreign manufacturers and/or distributors of food products must register with the FDA before their goods may be admitted.
Also, there are no restrictions or quotas on coffee, tea, and spices whether bottled, brewed or packaged, which means there is no limit to the amount you can import into the US.
Since 1994, Paragon Financial has been meeting the needs of Tea and Coffee importers/wholesalers through receivable financing and Purchase Order funding.
The process is relatively simple. You as the tea importer make a sale and receive a valid Purchase Order from a credit worthy client (Paragon can offer customer credit protection against bankruptcy to tea importers). Using a Vendor Guarantee or Cash Against Documents (CAD) supplied by Paragon, your vendor ships goods to the US that meet quality, quantity and timeliness standards. It is critical that the Tea Importer’s customers do not reject goods for any reason. This process is the Purchase Order funding part of the transaction.
Once the importer’s client receives the tea and verifies with Paragon receipt and satisfaction with the product, Paragon then factors the invoice generated. Factoring proceeds on imported perishable goods are typically in the 80-85% range. The Invoice Factoring proceeds go to the tea importer’s vendor (if a Vendor Guarantee was utilized) or to pay back Paragon for the Purchase Order financing. Subsequently, once the client of the tea importer pays Paragon, then the importer receives the balance of the invoice less Paragon’s original advance percentage and accrued factoring fees.
The benefit’s that Paragon Financial offers a Tea Importer/Wholesaler include:
- Credit Protection
- Ability to take on larger orders
- Companies with tax issues can be funded
- Online Accounts Receivable Management and Invoice Verification
- Off balance sheet funding
- Working Capital that flexes up and down with their company’s needs
- Partner who understand the Tea & Coffee Industry