Monthly Archives: November 2013

What is export finance?

Export Finance is designed to be used by Small and Medium Enterprises venturing out in to the foreign trade industry but it can also be used to help out rising business who might need the extra money to start to export but have budget constraints because of delayed customer payments or restrictive dealer payment conditions.

How does it work?

export overdraft for business1. First the client will apply for credit for their international client.

2. The export overdraft facility identifies a correspondent factor through our worldwide network in the factoring industry. They then get a credit limit to pay for the necessary transaction.

3. The moment credit score agreement have been obtained, the products may be sent and invoiced within exactly the same way when they would when they ended up being sent to the UK. This specific reduces the risk for the issues connected with rearing and showing characters associated with credit score and marrying these to payments associated with lading and inspection vouchers etc.

4. Within the assistance, overdraft facility liaison can provide the assignment notice for the invoice the client’s own dialect as well as compliant with their country’s lawful jurisdiction.

5. When the products have been delivered, a delivery receipt must be provided and filed with the facility.

6. Depending on the service levels needed, your Correspondent factor may perform task along with verification tests with the client.

7. The drawing of funds is identical with domestic invoice factoring.

8. Depending on the package you apply for, the correspondent can also collect debt from the international customer, again in their own language and law.

9. As with above, the liaison can also receive payment in the customer’s currency.

10. When the payment is settled, the remaining balance of the invoice will be credited back to the client minus the agreed transaction fee.

Now that you know what export finance is, it might just be what you need to help you start exporting.

Selective Invoice Factoring and Who Uses It

Selective invoice factoring, also referred to as spot, is a type to receivables financing where businesses get to advance a major percentage of the value of their sales invoice from a third party financing agent. It comes alongside other business financing types such as loans, equity financing, asset based lending, purchase order finance and merchant cash advance. What separates single invoice factoring is its characteristic where it allows companies to raise capital without any debt involved. Plus, it is to be noted that only one invoice of your choice will be subjected whenever you want to. Now you wonder. Who uses it then?

brokeUP AND COMING BUSINESSES: Most businesses in every industry that has recently started or are still building on their organization often find a hard time raising their needed funds during their first years. The reason is because they have not acquired as much assets yet which are requisite collateral for banks and other lenders. As an option, they are given the chance to do so but instead of borrowing they sell their invoices instead thereby hastening the recognition of cash which they may use to pay suppliers etcetera.

THOSE IN NEED OF CASH: There are a lot of established companies who despite of outstanding sales do not have enough cash. How come? Customers do not always pay in cash. In some instances, they pay on credit therefore cash is locked up. Selective invoice factoring is a good answer to this dilemma.

ENTITIES WITH LONG RECEIVABLES: To hasten up a certain receivable which could be large in amount and whose value can provide for a present need, companies who have long receivables make use of it too.

THOSE WHO WANT TO AVOID DEBT: Not all receivables are paid on time. Others do not even get paid at all and thus bad debts. These are inevitable and cannot be avoided unless you do not offer credit. By using a nonrecourse type of factor, you shift such risks and losses to the financing agent.

COMPANIES WITH EMERGENCY EXPENDITURES: Lastly, selective invoice factoring can also be used by companies who have urgent expenses. These can be anything from buying new equipment, repair of a major machinery used for production, cash shortage to provide for employee salaries and wages and practically any other operating expenditure. You never know when you have to disburse an amount vital for the continuation of operations.