How is the shift in supply chain financing affecting my import business?

[Mila.G]

I’m trying to understand how the recent shift in global supply chain financing is actually affecting my small import business. My usual lines of credit have tightened up significantly, and I’m hearing it’s because banks are now much more cautious about the inventory-based loans they offer to distributors like me.

[Sofia70]

Yeah, I felt it too. Last quarter our credit line got trimmed and the renewal terms got stricter even though our sales were steady. The bank asked for more collateral and a higher personal guarantee. They even flagged inventory-based loans as riskier and tightened covenants. I did a quick calc and saw we were borrowing a bit less, but the cost of funds went up. We started splitting orders into smaller lots to keep working capital firmer.

[Mila3]

From talking to a couple of lenders, it seems risk appetite is the driver more than anything. They want higher turnover, lower stocking days, and they look at the buy-sell ratios in your books. Do you think this is mainly a liquidity issue or is it really inventory risk?

[Madison_R]

I tried pulling in an additional bank line, but onboarding dragged on and they asked for more tax returns and supplier confirmations than a mortgage. We decided to hold where we are and just tighten our own repayment cadence with the existing banks.

[Brandon96]

Sometimes I think the real lever is how you work with suppliers. We shifted a couple of orders to prepay terms with a small discount, and that kept us afloat for a month, but it's a hassle and it's not a long term fix.