Posts tagged: export funding

Kinds of Export Funding

export fundingInternational trade is no doubt part of any entrepreneur’s long term goal. It spells bigger markets, more sales, risk diversification and asset maximization to name a few. But benefits aside, it also comes with its own set of challenges one of which includes export funding.

It’s true that resources, a lot to be exact, are necessary when venturing into the global market. With factors like shipment, customs, tarriffs, taxes and added administrative and operational costs, business owners need to identify their needs and trace which export funding options will suit each one best. To help with such endeavor, we’ve listed down some of the most apt and effective options. Read on and discover what they are.

1. Bank Loan

Bank loans involve significant and huge sums borrowed from a bank or similar financing institution. A long term type of credit, it often spans from five to twenty years and sometimes even more. It has a stipulated maturity and is to be repaid on set intervals over the course of the period with interest. Because of its size and length, it requires property collateral and involves scrupulous and meticulous application.

2. Mortgage

This is somehow similar to bank loans in terms of length, payment terms and amount. The difference lies in the fact that where bank loans can be used for whatever venture, a mortgage is specifically taken out to purchase real estate properties.

3. Bridging Loan

Unlike the first two, a bridging loan is a temporary and short term financing. It is a type of interim financing thereby one taken out to fulfill and provide for immediate short term liquidity needs pending the approval and/or availability of a permanent and bigger funding source such as a mortgage, bank loan, sale proceeds, income or the like. It is most popularly utilized to provide for down payments and other immediate expenses.

4. Receivables Financing

This makes use of a company’s receivables or sales invoices to draw cash. It works by advancing the value of the invoices before their scheduled maturity date in exchange for a fee which is often a minimal percentage of the total receivable value. Receivables financing has two main types namely factoring and discounting.

5. Merchant Cash Advance

This last type of export funding option is one that makes use of credit card sales. It allows businesses to borrow a certain sum with the payment as a percentage of every month’s total credit card sales. What make this a great method is that the level o payments is directly proportional to credit card sales thereby allowing the business to pay only up to what it can afford to.

Export Funding


On this page http://workingcapitalpartners.com/solutions/export-finance, you will learn more on export funds.

The Benefits of an Export Overdraft Arrangement

OverdraftDomestic sales can only do so much. The lure of international trade is real and the reason behind it is obvious, out there in plain sight. Opportunities abound but so do challenges; for instance financial risks, liquidity and collection. Luckily, there’s this thing we call an export overdraft arrangement.

An export overdraft is a type of financing particularly directed at entities that wish to take advantage of the world market without having to undergo the usual repercussions or threats that accompany it.

To export means to abide by international trade protocols and country-specific laws. It requires meticulous documentation, new market penetration, added collection responsibilities and of course the ability to dodge credit, interest rate and foreign currency risks. Let’s not even get started about receivables and cash availability.

But despite such challenges, entrepreneurs still want to do it. The cons may be present but so do the pros and they abound just as much if not more. But a smart business owner will want to mitigate such risks and challenges to the best they can. After all, who wants them tagging along with success? Nobody.

Export overdraft is a method that allows exporters to advance the value of their export sales invoices thus allowing them to receive cash almost immediately without having to wait for maturity. More often than not, receivables will lock up cash for prolonged periods of time preventing their immediate use and at times putting liquidity and solvency at risk. The longer a receivable remains outstanding, the higher the risks of non-collection. Cash sales are still there but majority of importers opt for deferred payments. They prefer to pay only until the goods have arrived to them or until they have been resold.

Because cash is received immediately, there’s less likelihood of losses due to the fluctuation in foreign currencies and delayed or default payments. Moreover, the duties related to collection shall be borne by the export overdraft provider. This includes all administrative duties and paperwork related to the job. Of course, this provides utmost ease for companies not only in terms of time and effort but also resources.

Export overdraft therefore also helps entities focus more on the income generating activities and operations instead of the backend duties. Plus, providers having had experience and expertise will often have a better grasp about a particular country’s culture, language and laws when it comes to invoices, payments and collections.

How to Plan Your Export Funding

export fundingExport funding has become one of the most widespread financing methods that aided a great number of businesses in putting themselves in the realm of international trade. It is a tried and tested tool that delivers the benefits of foreign trading such as growth and market expansion without the often prickly threats of financial risks (e.g. currency, interest rate and credit risks), strict legislations, scrupulous documentation requirements, collection hiccups and liquidity setbacks.

Not only has export funding been a ladder to small and medium scale enterprises and startups but it has also acted as a life saver for businesses in recovery. Even already established organizations find benefits in it, further increasing sales and strengthening profitability in a global scale.

To truly benefit from such financing medium, companies have to plan for its use from start to finish. After all, even a tool as great as it would fail to succeed if used incorrectly. In order to achieve its full potential and maximize the benefits that it gives, here is some expert advice on how to plan an export funding.

First, determine its effects on finances. Is the business really ready for exportation? Before thinking about whether or not to make use of such method, determine if the organization is really ready to trade on the international market. This is no joke and so operations as well as finances must be taken into consideration before anything else.

Second, determine needs and goals. It is crucial to identify the company’s needs in the export trade. Moreover, goals must be set. An endeavor won’t exactly be one if there is no end goal.

Third, identify territorial requisites. Each country that the business wishes to export to shall have its own set of rules and regulations. What these are and how to achieve them must be looked at and examined to determine if they are worth all the trouble and if the benefits of trading in such market will be greater than its costs.

Fourth, weigh out the alternatives. Is this financing medium the best option out there? There are many ways by which entrepreneurs can trade and bring their products overseas and export funding is only one of them. Part of planning its use will have to be scrutinizing if it really is the best option to take.

Lastly, find a trusted export funding company. They must not only be prompt in terms of providing for the invoice advances but must also be seasoned enough to handle overseas transactions. Their knowledge, skills and resources must be beyond par.

Export Funding Tips

export-fundingExportation in its simplest explanation means sending goods for sale or exchange in other countries. In business, such transaction is a sign of growth and expansion. You’d think that if given the chance, everyone would jump in on the opportunity without batting an eyelash. Unfortunately, that’s not how reality works. There are many factors to consider before the jump. Foreign trade is no joke. It is serious business to say the least and one of its most challenging facets has something to do with export funding.

When a business decides to place itself in the foreign market, it doesn’t come for free. There are costs to it. First of all, the company will have to study and make various researches regarding a particular country’s market. Products may have to be modified to suit the market’s needs, culture, traditions and preferences. Second, part of operations will have to delve into the international scene which obviously comes with costs. And let’s not forget about freight costs, currency exchange differences, tariffs, taxes and duties. All these and more will require adequate export funding.

With that said, businesses need to gear up in terms of finances. Below, are some tips we’ve gathered from the experts.

·       Always start with a plan. – This is the first step to everything. Make sure that you don’t dive head first without a strategy otherwise you’re only opening yourself up for losses and turmoil. Exporting is no joke as we’ve said earlier. This only means that ample caution must be taken when engaging in it. A plan not only acts as a map but also serves as a reminder to keep your eyes on the prize.

·     Know your sources. – There are many options when it comes to financing. The key here is to determine which ones would bring in the most benefits at the least cost and disadvantage. Research, examine and analyze before you choose.

·    Estimate expenses. – Make a careful analysis of your needs to come up with an effective estimate of possible expenses. This should aid in determining the costs to expect and prepare for.

·  Budget wisely. – When resources have been acquired, make sure that they are allocated as efficiently and effectively as possible. This is where budgets and financial plans come in handy.

·  Be prudent. – When using your export funding, practice prudence. In accounting, this is where you expect the worst where expenses are best overstated and income understated in cases of doubt. This should prevent the likelihood of shortages in funds and overestimation of sales.Visit http://workingcapitalpartners.co.uk

What is Export Finance and How Does it Differ from the Rest

You may have already heard about export finance and export overdraft but never really got to know what it is and what it does. Well today is the day that you find out so go on and read. You need to add to the cornucopia of your knowledge. Besides, you never know if you might actually need one in the future. It’s always best to be aware of your options.

First of all, it is designed to be furnished by small and medium scale enterprises that delve into the export market. Moreover, it is also used to support a growing entity’s cash flow needs especially when its export operations are deferred or prevented by strict supplier terms and the delayed payment by owing customers.

By now, you may already know that cash flow problems can deter and derail any company’s plans of expansion and growth. Even its regular operations can be disturbed and made unfeasible. Just because sales are up does not exactly denote the presence of liquid resources and actual cash. Plus, most suppliers have requirements that have to be complied with first in order for them to extend credit to companies.

The aforementioned dilemmas can be a huge hiccup to the export plans of a business. The opportunity is great and the returns are promising but there are road blocks. So how do you remove these boulders from your path? The answer is export financing.

export fundExport financing helps entities sell overseas and export their goods without the complications of the usual paperwork and the risks of not being able to collect. As an entrepreneur, these two are huge dissuasions to one’s plans and if they can be overcome with then the better.

In an export financing arrangement, payment for the goods and/or services provided are attained with the help of a financial facility or company that have expertise on the said service. Companies can go on and export their offerings in other countries and the facility will take care of the collection and in the assurance that documents, paper trail and collection are achieved. Of course, a fee will be required in exchange of the service but knowing the nitty-gritty and bloody transactions and requirements that one would have to do if one chooses to do the process on their own, the fees are very well worth it. After all, you have to aspire for growth and you can’t do it if you stay in one place forever.

If you want to know about how export finance works, click this page workingcapitalpartners.co.uk

Business Lending Options for the Businessmen and Businesswomen

Knowing the types of business lending options and for when and where they are used is beneficial to all companies even if you are not looking for a loan option at the moment. Plus, it pays to be prepared. You never know when you might need one so it is best to keep abreast and know which alternative will be most beneficial for you and your company. So let’s proceed and discuss briefly the different types to it.

export fundingEXPORT FUNDING is the solution to help businessmen who are in the export industry. What export funding facilities do is that they provide you with the cash flow to support your exporting operations like sourcing, manufacturing and delivery of goods overseas.

TERM LOANS are those that come with a predetermined interest rate and are to be repaid either monthly, quarterly, semi annually, yearly or depending on the credit terms. These are by far the most common option in the list and are those that are often used in the corporate world by those with sound financial resources and established small, medium and large companies.

SECURED ones are those that come with an asset used as collateral or as a form of guarantee in the event of non fulfilment of obligations as stated in the agreement or contract. Such assets may be limited to those that are company owned or may encompass and include personally owned assets of the owners. This is common where the values to be borrowed often include a rather large amount.

COVENANTS are those that come with a condition to the borrower where failure to comply gives the lender the power and the right to demand full payment of the amount owed in full. Such covenants are arranged on a case to case basis. These may be a requirement to maintain equity, a certain cash flow level, limited allowable other loans and the like.

PERSONAL GUARANTEE is where the lender provides a personal guarantee for the business using his or her own credit history for qualification instead of that of the business. This one can still be beneficial but may be disregarded by companies with multiple owners as the risks to their personal assets are out there.

Moreover, there are many other business lending options for your business. It would be better to seek advice from your counsel or financial consultant as to what options can provide the most advantage on your part with the most minimal risks and costs. Having the resources to make a company operate is a key player in ascertaining success. It may be challenging and hard but with the right plan and strategies, you will surely get the results you want.

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