A key problem facing many exporters is cashflow – the need to offer cash to customers but at the same time the need for cash to finance growth. For exporters selling to clients in emerging markets, export finance becomes especially useful.
Export finance involves the extension of medium- or long-term financing to the importers of capital goods and services
Credit and finance is the life and blood of any business whether domestic or international. Exporters will often go to their bank or to specialist financial organisations to help them get finance.
As an exporter you may need:
The pre-shipment financing: this is the finance for the period before your enterprise ships the goods to the customer
The post-shipment financing is the trade finance which comes when the enterprise sent the goods to the customer
Sources of pre-and post-shipment financial assistance
- Commercial bank: the commercial banks can offer both pre-and post-shipment finance
- Buyers/importers: Foreign buyers might make down payments or advance payments that reduce
- Suppliers: Extended payments from suppliers is one of the easiest source of finance to negotiate and the simplest to administer