Methods of Payment, export finance.#Export #finance


Methods of PaymentMethods of Payment

Key Points

  • International trade presents a spectrum of risk, which causes uncertainty over the timing of payments between the exporter (seller) and importer (foreign buyer).
  • For exporters, any sale is a gift until payment is received.
  • Therefore, exporters want to receive payment as soon as possible, preferably as soon as an order is placed or before the goods are sent to the importer.
  • For importers, any payment is a donation until the goods are received.
  • Therefore, importers want to receive the goods as soon as possible but to delay payment as long as possible, preferably until after the goods are resold to generate enough income to pay the exporter.

Cash-in-Advance

With cash-in-advance payment terms, an exporter can avoid credit risk because payment is received before the ownership of the goods is transferred. For international sales, wire transfers and credit cards are the most commonly used cash-in-advance options available to exporters. With the advancement of the Internet, escrow services are becoming another cash-in-advance option for small export transactions. However, requiring payment in advance is the least attractive option for the buyer, because it creates unfavorable cash flow. Foreign buyers are also concerned that the goods may not be sent if payment is made in advance. Thus, exporters who insist on this payment method as their sole manner of doing business may lose to competitors who offer more attractive payment terms.

Letters of credit (LCs) are one of the most secure instruments available to international traders. An LC is a commitment by a bank on behalf of the buyer that payment will be made to the exporter, provided that the terms and conditions stated in the LC have been met, as verified through the presentation of all required documents. The buyer establishes credit and pays his or her bank to render this service. An LC is useful when reliable credit information about a foreign buyer is difficult to obtain, but the exporter is satisfied with the creditworthiness of the buyer’s foreign bank. An LC also protects the buyer since no payment obligation arises until the goods have been shipped as promised.

A documentary collection (D/C) is a transaction whereby the exporter entrusts the collection of the payment for a sale to its bank (remitting bank), which sends the documents that its buyer needs to the importer’s bank (collecting bank), with instructions to release the documents to the buyer for payment. Funds are received from the importer and remitted to the exporter through the banks involved in the collection in exchange for those documents. D/Cs involve using a draft that requires the importer to pay the face amount either at sight (document against payment) or on a specified date (document against acceptance). The collection letter gives instructions that specify the documents required for the transfer of title to the goods. Although banks do act as facilitators for their clients, D/Cs offer no verification process and limited recourse in the event of non-payment. D/Cs are generally less expensive than LCs.

An open account transaction is a sale where the goods are shipped and delivered before payment is due, which in international sales is typically in 30, 60 or 90 days. Obviously, this is one of the most advantageous options to the importer in terms of cash flow and cost, but it is consequently one of the highest risk options for an exporter. Because of intense competition in export markets, foreign buyers often press exporters for open account terms since the extension of credit by the seller to the buyer is more common abroad. Therefore, exporters who are reluctant to extend credit may lose a sale to their competitors. Exporters can offer competitive open account terms while substantially mitigating the risk of non-payment by using one or more of the appropriate trade finance techniques covered later in this Guide. When offering open account terms, the exporter can seek extra protection using export credit insurance.

Consignment in international trade is a variation of open account in which payment is sent to the exporter only after the goods have been sold by the foreign distributor to the end customer. An international consignment transaction is based on a contractual arrangement in which the foreign distributor receives, manages, and sells the goods for the exporter who retains title to the goods until they are sold. Clearly, exporting on consignment is very risky as the exporter is not guaranteed any payment and its goods are in a foreign country in the hands of an independent distributor or agent. Consignment helps exporters become more competitive on the basis of better availability and faster delivery of goods. Selling on consignment can also help exporters reduce the direct costs of storing and managing inventory. The key to success in exporting on consignment is to partner with a reputable and trustworthy foreign distributor or a third-party logistics provider. Appropriate insurance should be in place to cover consigned goods in transit or in possession of a foreign distributor as well as to mitigate the risk of non-payment.


Export Finance, What is export finance, export finance.#Export #finance


What is export finance?

  • Documentary credits
  • Bills of exchange
  • Letters of Credit
  • Forfaiting (purchasing the receivables or traded goods from an exporter)
  • Export credits (to reduce risks to funders when providing trade or supply chain finance)
  • Foreign exchange

Generally speaking, sellers of goods or services want to get paid as soon as possible, even before they trade, and buyers want to delay payment for as long as possible, to maintain good cashflow and give them time to sell on to their end customers. This inherently means third parties can offer some form of financial guarantee, bridging the finance gap, and ensuring trust between the buyer and the seller.

Much trade is done cross border, increasing risk when importing or exporting goods.

Exporting goods to another country or domestically to a new buyer is inherently risky. Therefore a growing company will want to mitigate some of these risks and also structure their finance in such a way as to allow sustainable growth.

The problem

When a company is growing it is very difficult to finance in the right way and have the correct processes in place. We aim to assist in that journey and in the event that export finance can be placed in the right way, then it can provide a lot of comfort to both buyers and sellers. An example of this is a letter of credit facility; where company X is exporting to company Y, they want to know that payment will be received for the goods. A letter of credit facility is set up by the buyer and seller s banks. On the basis of the conditions specified in the letters both parties have comfort knowing that the other will release goods and payment when product is shipped or documents are received. This allows comfort within international trades and structures that promote trust with new counterparties.

The problem that many businesses face are simple distrust or lack of understanding in relation to their counterparty. In the event that there is sometimes blind trust or the incorrect mechanisms in place, then there may be goods sent with non-payment, dispute, internal problems, product irregularity and no security or insurance, in the case of enforcement.

How can it help?

Export finance is can be one simple finance instrument or several different facilities which can be structured to ensure some form of financial guarantee and establish trust between a buyer or seller. Whether it is a guarantee of payment from a customer when goods are exported, the advance payment of a transaction so that goods can be produced, or the discounting of invoices from clients to avoid 30-180 day payment delays, export finance can help reduce working capital problems.

Types of export finance include:

  • Cash flow from the business or lending
  • Trade finance
  • An standby Letter of Credit, which may be used as an insurance policy
  • Letters of credit
  • Confirmations from other banks if required in the cycle
  • Structured finance
  • Cash against documents
  • Financial instruments bonds/prom notes
  • Insurance backed facilities

Export finance: What are the requirements?

Export finance is looked at and reviewed on a case by case basis. Generally, a financier would ask for the following in an application:

  • Audited financial statements
  • Full business plans
  • Financial forecasts
  • Credit reports
  • Details and references of the directors
  • Information on assets and liabilities

Benefits of export financing

Export finance helps businesses grow without having to take on other investment such as equity investment, which could involve giving away a share of your company, having additional shareholders and could limit the way you want to grow. Export finance facilities are generally standalone from existing bank facilities, so often those with current overdrafts or loans, some export finance facilities such as Letters of Credit might not get in the way of existing facilities, nor do they appear on balance sheets.


Trade Finance (Import and Export Finance) #lords #of #finance


#trade finance

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Trade Finance

Your eligible deposits with Barclays Bank PLC are protected up to a total of £75,000 by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme. This limit is applied to the total of any deposits you have with the following: Barclays, Barclays Bank, Barclaycard, Barclays Business, Barclays Capital, Barclays Corporate, Barclays UK Ireland Private Bank, Barclays International Private Banking, Barclays Premier, Barclays Private Bank, Barclays Stockbrokers, Barclays Wealth, Woolwich Mortgages. Any total deposits you hold above the limit between these brands are unlikely to be covered. For further information visit www.fscs.org.uk ^ (opens in a new window).

Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP.

*Lines are open Monday to Friday, 8am to 6pm. To maintain a quality service we may monitor or record phone calls. Call charges and information.

^You are about to link through to a non Barclays site. Please note that Barclays is not responsible for the accuracy or content of this website, and is not recommending it or giving any assurances as to its standing. Barclays does not accept any liability for any loss or damage suffered as a result of its use.


Project and Export Finance #kia #motors #finance


#project finance

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Project and Export Finance

Project and export finance structures can be complex, which is why project sponsors often choose to work with a specialist to develop creditworthy and bankable financial structures to underpin their projects.

As a leading global advisor and arranger of limited recourse project financing, HSBC is committed to supporting your projects in the way you need. Our global scale and reach means we are able to help Clients capture the right project finance opportunities available, wherever they may be. And where others often manage project and export finance structures separately, HSBC s teams work together to bring you a more aligned and effective solution.

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Easy Export Finance – Export Loans – HSBC Commercial Banking #ford #finance #calculator


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Easy Export Finance

* This is only applicable to eligible customers as determined by the Hong Kong and Shanghai Banking Corporation Limited (the “Bank ) at its sole discretion.

To apply for Easy Export Finance, customers are required to complete an Easy Export Finance Application Form (“Application Form”) and a Guarantee by Individual(s) for Application to Easy Export Finance (For Limited Company Only) (“Personal Guarantee”), which may be downloaded here or obtained by calling our Customer Service hotline on 2748 8288. Terms and conditions set out on the Application Form and Personal Guarantee apply.

The Bank will assess the applications of existing trade customers and notify the customers of the decisions within two working days upon receipt of all required application documents. For customers who do not hold valid trade accounts with the Bank, a new trade account (for which all the required account opening documents must be provided) should be opened when you apply for Easy Export Finance. The Bank will assess the applications and notify the customers of the decision within four working days upon receipt of all required application documents.

A one-off set-up fee of HKD1,000 will be charged upon successful application.

Each request for negotiation of Export DC bill is subject to the customer s completion of a Letter of Indemnity (in form and substance satisfactory to us) and to approval / acceptance at the Bank s sole discretion.

All applications for Easy Export Finance are subject to the usual credit assessment approval procedures of the Bank including a satisfactory result of a credit check received from the Commercial Credit Reference Agency conducted by the Bank after receipt of the application form and supporting documents. The Bank shall have the final decision on the applications. The Bank reserves the right to amend the interest rate, benefits, terms and conditions without prior notice.

In the event of discrepancy between the English and the Chinese versions of the Terms and Conditions, the English version shall prevail. The terms and conditions are subject to prevailing regulatory requirement and shall be construed and governed in accordance with the laws of the Hong Kong Special Administrative Region.

Help and support

Case study: The current and future gateway

Trade experts see China’s efforts to integrate the region, culminating in the One Belt, One Road initiative, as giving Hong Kong a chance to play to its strengths.

Case study: How logistics industry is being rewired by the e-commerce boom

Accelerating growth in e-commerce has created a shake-up in the logistics industry in Hong Kong as small, innovative companies look to capitalise on the city’s standing as an Asian shipping hub.


Export Financing #student #finance #contact


#export finance

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Export Financing
Under the National Export Initiative

The Export-Import (Ex-Im) Bank provides financing for U.S. businesses and their customers in foreign markets where the private sector is not readily willing or able to provide financing. During fiscal year 2012, Ex-Im supported about 255,000 U.S. jobs and reported a fourth-straight record-breaking year with $35.7 billion in authorizations and more than $50 billion in sales supported. During the past four years, Ex-Im has supported nearly 1 million jobs, all at no cost to the American taxpayer.

Global Business Solutions. In an effort to ensure there is no wrong door within the federal government to help SME exporters, the Export-Import Bank, SBA, Foreign Agricultural Service, and the Overseas Private Investment Corporation are collaborating to create U.S. government financing packages to meet the need of exporters and lenders alike.

Financing for Small to Medium-Sized SMEs:
Small- and medium-sized enterprises (SMEs) have played a critical role in driving record export growth. A record 287,000 U.S. SMEs exported goods in 2010, accounting for 98 percent of all identified exporters and helping demonstrate the export potential of small businesses.

  • Ex-Im Bank helped more than 3,300 small businesses expand their export sales in 2012. More than 650 small businesses worked with the Ex-Im Bank for the first time in 2012, and Ex-Im authorized a record amount in export financing for small businesses: 6.1 billion. Ex-Im estimates 85 percent of Bank transactions benefit small businesses.
  • From the launch of the NEI through 2012, the Small Business Administration (SBA) backed more than 2,400 loans to 3,500 small businesses through its financing programs, supporting a combined $3.4 billion in small business sales during that period.

Since the launch of the NEI, the Small Business Administration has trained 273 Small Business Development Center (SBDC) counselors across the country to counsel small businesses new to exporting. An additional 136 SBDC counselors have achieved advanced Certified Global Business Professional accreditation. SBA also has trained more than 11,000 loan officers in SBA s export financing programs; significantly increased the number of commercial lenders active in its Export Working Capital, International Trade Loan and Export Express programs; and provided financing to more than 3,500 small business exporters.

Export growth from U.S. investments. When American companies establish a direct physical presence overseas, U.S. exports often follow that investment. The Overseas Private Investment Corporation has assisted in this process, and OPIC-supported projects have resulted in more than $2.1 billion in U.S. exports to developing countries from fiscal years 2010 to 2012.


Easy Export Finance – Export Loans – HSBC Commercial Banking #cars #finance


#export finance

#

Easy Export Finance

* This is only applicable to eligible customers as determined by the Hong Kong and Shanghai Banking Corporation Limited (the “Bank ) at its sole discretion.

To apply for Easy Export Finance, customers are required to complete an Easy Export Finance Application Form (“Application Form”) and a Guarantee by Individual(s) for Application to Easy Export Finance (For Limited Company Only) (“Personal Guarantee”), which may be downloaded here or obtained by calling our Customer Service hotline on 2748 8288. Terms and conditions set out on the Application Form and Personal Guarantee apply.

The Bank will assess the applications of existing trade customers and notify the customers of the decisions within two working days upon receipt of all required application documents. For customers who do not hold valid trade accounts with the Bank, a new trade account (for which all the required account opening documents must be provided) should be opened when you apply for Easy Export Finance. The Bank will assess the applications and notify the customers of the decision within four working days upon receipt of all required application documents.

A one-off set-up fee of HKD1,000 will be charged upon successful application.

Each request for negotiation of Export DC bill is subject to the customer s completion of a Letter of Indemnity (in form and substance satisfactory to us) and to approval / acceptance at the Bank s sole discretion.

All applications for Easy Export Finance are subject to the usual credit assessment approval procedures of the Bank including a satisfactory result of a credit check received from the Commercial Credit Reference Agency conducted by the Bank after receipt of the application form and supporting documents. The Bank shall have the final decision on the applications. The Bank reserves the right to amend the interest rate, benefits, terms and conditions without prior notice.

In the event of discrepancy between the English and the Chinese versions of the Terms and Conditions, the English version shall prevail. The terms and conditions are subject to prevailing regulatory requirement and shall be construed and governed in accordance with the laws of the Hong Kong Special Administrative Region.

Help and support

Case study: The current and future gateway

Trade experts see China’s efforts to integrate the region, culminating in the One Belt, One Road initiative, as giving Hong Kong a chance to play to its strengths.

Case study: How logistics industry is being rewired by the e-commerce boom

Accelerating growth in e-commerce has created a shake-up in the logistics industry in Hong Kong as small, innovative companies look to capitalise on the city’s standing as an Asian shipping hub.


International Business #international #business, #international, #global #trade, #global #edge, #transnational, #multidomestic, #commerce, #economy, #import, #export, #money, #world, #region, #country, #globe, #marketing, #ciber, #university #of #texas, #business #research, #marketing #trade #shows, #leads, #finance, #banking, #culture, #knowledge, #language, #yellow #pages, #resources #on #the #www, #governments, #statistics, #news, #press, #books, #international #calendars, #travel, #culture, #finance, #education, #insurnace, #law, #logistics, #marketing, #geert #hofstede, #global #trade, #stephen #taylor, #stephen #j. #taylor


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I want to extend a personal welcome to you. The International Business Center is a not-for-profit organization that has invested hundreds of hours creating a series of dynamic and valuable resources for international business people, international business students, and teachers and professors at international business schools throughout the World.

International business, Multinational, Transnational, Globalization, Multi domestic, Worldwide, and the Global Marketplace, these are terms you deal with daily.

We know international business success requires more business acumen than managing a domestic enterprise. You not only deal with traditional business functions and values, but also must understand and work from a global perspective that adds politics, culture, monetary variables, time, and distance to the international business management equation.

I believe you’ll find the International Business Center is an excellent resource for a variety of your global business questions and needs, with particular focus on those topics unique to working in the International business arena, including intercultural issues.

Stephen Taylor. Executive Director
the International Business Center

Stephen Taylor is Senior Partner of the Sigma Two Group and Executive Director of the International Business Center, and he holds a Master of Arts degree in International Management Studies – Global Leadership from the University of Texas at Dallas School of Management. Stephen has held executive management positions in international business development, sales, marketing, and human resources at leading global companies, including Henkel, 3M Company, and Unilever. He has worked and traveled extensively throughout the world, and is currently based in Los Angeles. Curriculum Vitae

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What is a Country’s
‘Corruption Perception Index’ ?

2013 – The International Corruption Perceptions Index (CPI) from Transparency International has been released. The report charts the perceived level of corruption in each of 176 countries.

By utilizing a process of surveying perceptions by business people, academics and risk analysts, of the degree of corruption within a country, the numeric indexes will range between 10 (highly clean) and 0 (highly corrupt).

So what are the results for this year? At the top of the list was Denmark, Finland, and Sweden with a CPI Index score of 90, followed by Sweden with 88 and Singapore at 87.

At the other end of the scale, and considered the most corrupt nations on earth is Somalia, North Kores, and Afganistan at 8 with Sudan at 13 and Myanmar at 15, followed by Turkmenistan and Uzbekistan at 17.

The report makes for good reading, and an excellent topic for discussion among international business managers, always concerned about risk, and the best way to hedge against potential losses.

Also of note is that the first Corruption Perception Index in 1995 had the United States at 7.8(78 under new 0-100 scale). Now, 17 years later in 2012, the perceived corruption in the US has increased by 6.4% to a current CPI of 73 .

Before your next visit and negotiation session in any country, perhaps it may be advantageous to look up the Corruption Perception Index?

To review the complete listing of the Corruption Perceptions Index, including the methodology used, go to one of these locations:

You can download the full eight CPI report in Acrobat PDF at this LINK

It happens somewhere in the world everyday. Negotiations have been accelerating and both sides seem to be nearing a fruitful culmination. The end is in sight when suddenly it begins to unravel. Perhaps impatience to ‘close’ was the trigger, or frustration that one side seemed to be ‘back pedaling’. Whatever the reason, the deal has fallen apart and someone will be on the phone to explain this to the Executive VP of Global Marketing.

Perhaps one of the most difficult aspects of international business is dealing with, and understanding, differences in culture. Visit the International Business Etiquette and Manners Website to learn details about cultures from over 35 Countries. MBA and Business Administration Degree students may find the information helpful for future international travels. The Site also has an explanation of Geert Hofstede’s world famous studies and analysis of cultural differences .

The Hofstede analysis graphs are presented for each of the Countries, giving the global business person better insights to diversity.


Red Alert:
International Business Travelers

As an international business person, we urge you to use extra caution and common sense when it comes to travel and visibility while on business or pleasure. This link leads to travel related topics and current travel warnings

We want to thank Kimberley Roberts for her frequent contributions to our international Web sites:

DISCLAIMER: This Website contains hyperlinks to other Web sites for the convenience, education, knowledge, news, and information of our visitors. However, we are not responsible or liable for the content, materials, words, images, information, or data on those Web sites.

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Export Finance ~ Hampshire Chamber of Commerce #close #premium #finance


#export finance

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Export Finance

Access to Export Finance

What is Export Finance?

Export financing describes the activity of lending organisations helping businesses by financing their export acitivites. It promotes trades as it provides an opportunity for businesses who would otherwise not have been able to trade internationally due to financial constraints.

UK Export Finance

They are the UK’s export credit agency. They help UK exporters by providing insurance to exporters and guarantees to banks to share the risks of providing export finance. In addition, they can make loans to overseas buyers of goods and services from the UK. UK Export Finance is the operating name of the Export Credits Guarantee Department (ECGD).

UKEF is a ministerial department, supported by 1 public body.

EXPORT PAYMENT METHODS

A crucial part of any transaction is ensuring you get paid. There are different payment methods which you should consider. These are:

  • Cash in Advance
  • Documentary Collections
  • Open Account
  • Documentary Credits or Letters of Credit

Detailed information can be found by clicking here

LETTERS OF CREDIT

Getting paid on time and securely is the most important financial consideration when embarking on international trade; using a letter of credit helps to avoid these pitfalls.

What is a Letter of Credit?
A Letter of Credit is a written guarantee by a bank assuring payment for goods. It will have strict terms specifying both the amount of money to be paid and within what time frame. If all the conditions are met, payment is guaranteed.

How can we help?
Hampshire Chamber of Commerce is working in partnership with Bristol Chamber of Commerce to offer a Letter of Credit Checking service. We also have members of the Chamber who offer this same service. If you would like to know more please contact the International Trade team on 01329 242420.

FOREIGN CURRENCY

Hampshire Chamber of Commerce via the British Chambers of Commerce has partnered with exchange experts, Moneycorp to provide money saving foreign exchange to Chamber members. If you have international payment requirements Moneycorp can help you save hundreds, thousands, even tens of thousands every year.

Key Benefits

  • Bank-beating exchange rates – typically as much as 4% better than the banks
  • Expert market guidance at the end of a phone – Moneycorp’s professional currency dealers can guide you through the foreign exchange market
  • Fast online money transfers 24/7 – trade at convenient times with online accounts and live rate information
  • Safeguarded client funds – Moneycorp is authorised and regulated by the Financial Conduct Authority to provide payment services and safeguards all client funds in segregated customer accounts

Exclusive Member Package

Free foreign exchange health check
Free assessment of your business’s foreign exchange requirments, to help you pin-point where you could improve your margins

Low transfer fees
Our fees start from just £5, a substantial saving over the £20-£40 that banks typically charge

Free account opening
Buy and sell any of 35 currencies

Chamber Foreign Exchange will assess your

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What is export finance? MarketInvoice Learning Centre #finance #times


#export finance

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What is export finance?

Export finance offers a way for businesses to release working capital. specifically from overseas transactions, that might otherwise remain tied up in invoices for long periods of time.

This type of trade finance is very specific, tailored to suit the financial demands of companies who export trades. It allows business to grow overseas. It also increases your trade with large foreign multinationals.

There are a lot of benefits to a business selling invoices overseas, but there can also be many financial risks as well. It is important to fully understand the risks and the government regulations before selling overseas.

The problem

When a product is sold, even within the UK, the payment terms can be long and very hard to manage. Add to that the time taken to ship and deliver it overseas and this time period can extend even further.

Understandably, it takes longer to get paid. Additional time and energy is also required to check buyers are creditworthy and obtain references.

Everything about the sales process is extended.

Even with careful time planning and financial management, exporting goods can place an incredible financial strain on your business. The difference between profit and loss on a transaction can depend entirely on the time it takes to get paid.

Export financing, therefore becomes a key factor in the competition between exporters.

How can MarketInvoice make export finance work for you?

We can help you release funds tied up in foreign debtor invoices so that you can continue to grow.

We’ve worked with UK exporters to assist trades to a wide variety of countries, from Azarbaijan to Ghana, Guatemala to Saudi Arabia and Nigeria to Singapore.

1. Funding is not dependent on your business performance or even the sector you trade in

2. There is no restriction on the level of export sales

3. What’s important is the quality of the debtor, not necessarily the credit rating of the country

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