Export Basics: Financing Exports – 8th in this series
Export financing is often a key factor in a successful sale.
The following factors are important to consider in making decisions about financing (from the Basic Guide to Exporting):
- The need for financing to make the sale
- The length of time the product is being financed
- The cost of different methods of financing
- The risks associated with financing the transaction
- The need for pre-shipment financing and for post-shipment working capital
Extending Credit~
Foreign buyers often press exporters for longer payment periods. Although it is true that liberal financing is a means of enhancing export competitiveness, you need to carefully weigh the credit or financing that you extend to foreign customers. Moreover, the extension of credit by the seller to the buyer is more common outside the United States. U.S. sellers who are reluctant to extend credit may face the possibility of the loss of the sale to their competitors.
Other factors to consider:
- WORKING WITH COMMERCIAL BANKS
- USING DISCOUNTING AND BANKER’S ACCEPTANCES
- USING EXPORT INTERMEDIARIES
- USING GOVERNMENT ASSISTANCE PROGRAMS
Several federal, state, and local government agencies offer programs to assist exporters with their financing needs. Some are guarantee programs that require the participation of an approved lender; others provide loans or grants to the exporter or to a foreign government.
To learn more: Export Financing & Financing Exports
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