Countries in the United States are the world's largest trading zones on our doorstep, there's little wonder that more and more companies are turning to export as a means of boosting their business.
Exporting however, isn't a footstep to be taken lightly and kick-starting an export initiative can be costly. The good news is that with thorough planning and the right finance partner, the rewards can be impressive.A fundamental challenge exporters facing is cash flow. Demands on funds are huge and it's easy to find them spread more thinly than is comfortable: there's the investment required to seek out potential markets and the need to offer attractive terms of credit in order to win new contracts and customers.
Today the export procedure is quicker and Letters of Credit are largely outdated. Goods are being shipped faster and documentation often lags behind. Thus, customers are becoming less interested in doing business with suppliers that insist on using Letters of Credit because they have to commit funding to support purchases up front and deal with an excess of paperwork. To be competitive it's essential to be prepared to base your export initiative on 'open account' terms - issuing an invoice on the dispatch of goods or services and giving the customer somewhere between 30 and 90 days to pay.
But all is not lost. The key is to find the right funding partner and funding mechanism to help alleviate the risks associated with exporting and stabilize the cash flow required to fund it.
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