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Export Finance

When you grow your business and send it overseas, you may need to use export finance. Export finance provides you with a chance to grow the company as you can accept payments from overseas clients and have the funds within days versus months. Exporting firms often need to wait months to acquire the money from their clients and this will dip into your cash flow. This leaves you with a struggle to maintain your business because you do not have the funds coming in to help you pay your bills. When you cannot pay your loans in a timely manner, your business credit will start to suffer and before you know it, you will not be eligible for any loans. If the money isn't coming in and it's tied up in invoices, you are going to struggle to pay your own employees and suppliers.

To acquire export finance, you will need to acquire the following information and have it ready to provide to lenders:

  1. Financial statements. Lenders will need to see about 1-3 years worth of financial statements to see how your business has been able to do. Audited statements are your best option as it shows lenders accurate and exact details pertaining to your business.
  2. Tax returns. In addition to your financial statements, you will also need to provide tax returns to show lenders. The tax statements show them exactly how much money your company is generating.
  3. Solid personal and business credit. Having higher credit rating helps to show lenders that you are able to sustain your debts and that you demonstrate strong financial control. Look for a personal credit score of 700 or higher and seek out a business credit score of at least 80 in order to acquire the most amount of money for your company.

Larger businesses will have an easier time acquiring export financing due to their higher sales and large market appeal. Smaller businesses can still acquire export finance for the company, but they will need to try much harder to acquire the money.

When you apply for export finance, you are able to accelerate the payments of your customers. You don't need to wait on them to pay their invoices as you will have the invoice amount paid in about 24-48 hours after generating it. How do you get involved with export finance? Of course the first step you need to take is to acquire a factoring company that will provide you with the funds and then handle the collection process. Upon selecting a company to manage the invoices, you will then do the following:

1.      Continue carrying on your business as normal. Sell your products to your customers and then deliver them to your customers. Invoice your customers upon shipping out your products.

2.      Once the invoice has been sent out, you will then submit it to the factoring firm. They will offer you an 80-85% initial payment for the invoice. This is your initial deposit for the invoice.

3.      The factoring firm will work with the customers to collect the rest of the funds. Once they have the money, they will pay you the other 15-20% for your invoices. Minus a fee for the invoices, you will have export finance money in a short amount of time so you can immediately sustain your businesses cash flow.

The one thing you do need to know about export finance is that you must be able to have reputable customers to work with. Without reputable customers to work with, it will be a hard thing to acquire an export finance company to use.

Corporate Credit Concepts specializes in export finance. For more information about export finance and how it might benefit your business, please CLICK HERE for a free phone consultation.

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