| Export Financing. An overview. |
| Written by Wade Henderson |
| Saturday, 06 February 2010 08:03 |
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Small businesses often expand their horizons in the quest of new foreign markets and increased international sales. For this reason, they need Export Financing to be able to cover all the cost of the services or goods that they wish to export.
Small businesses often expand their horizons in the quest of new foreign markets and increased international sales. For this reason, they need Export Financing to be able to cover all the cost of the services or goods that they wish to export. There are various scenarios under which Export Financing may be needed in order to cover costs. The initial phase can be very challenging because there is a need for investing in developing a better understanding of the market a company is going to be immersed in. These kinds of investment take both money and time. Marketing is another big requester for Export Financing. Your company needs to invest in well developed advertisement and marketing for your product to be known in the other country. Exporters often go to international fairs to hire translation services for their brochures, catalogues and websites. All those expenses are costly. When purchasing or making your products or services developed for export, because once it has received an order from a customer in another country or expects to receive orders the exporter will need working capital or financing to purchase machinery, equipment or property. When you have made the export sale and it is waiting for payment on terms agreed upon, because certain exports can take from 90 and 180 days to conclude. Often small exporters do not have sufficient cash flow to cover all costs in the export process, until the customer pays abroad. Then, were do I find Export Financing for my company? The easies first step is to go the bank your company already works with, the one you have a strong relation with. If for any reason this bank is not a good source of funding for your exports, then you need to start a relation with a larger bank. It is not strange to hear big banks not wanting to take risks of this type. There are several programs financed by the U.S. Government that offer Export Financing through loan guarantees which allow exporters to apply for extra funding from commercial financial institutions, relying on these guarantees. Some of the widely known options for Export Financing offered by The Federal Agency for the Development of Small Business (SBA) are: Working Capital Program for Export by SBA, the International Trade Loan Program, the Normal Program of Loan Guarantees for Business, SBA Export Express, The Export-Import Bank (Ex-Im Bank), The Overseas Private Investment Corporation Overseas OPIC, the Department of Agriculture, and the National Association of State Development Agencies. About the Author: Wade Henderson - very Professional - 15 yrs in the Business Finance Field - strong reputation for getting the deal done. IMMFinancial.com Small Business Factoring Receivable Financing |