Export financing consists of financing future receipts from exports/sales that you have made abroad.
Companies have found in internationalization the best way to grow and succeed outside their borders. Those that invest abroad are more competitive and better resist crises.
In an increasingly globalized world, foreign markets have a high barrier to entry, the risk of default, which affects companies that want to sell outside their market.
This article analyzes the main problem of an exporting company in terms of pre-financing and post-financing of its foreign trade operations and indicates types of financing beyond banking, such as export leasing.
Índice
Need for export financing
Financial needs may arise throughout the production period, being called pre-financing of exports or from the delivery of the merchandise until it is collected, denominated post-financing of exports.
Export pre-financing
This funding is given in manufacturing time and it can be received until the delivery of the product, that is, until the merchandise is transported.
He aim of this financing is to receive liquidity to produce the goods to be exported. And it is usually formalized through loan policies or a credit.
Post-financing of exports
This type of financing allows exporting companies advance collections, as a consequence of a deferral of payment. In other words, post-financing is granted to the exporter when it allows the importer to make deferred payment.
The term of this financing goes from the transport to the expiration date of the collection of the operation.
Non-bank export financing: Export Leasing
Perhaps you already know that there are other types of non-bank financing for exports such as forfaiting and factoring. But, you should know all your options.
He export leasing Also known as international leasing, it is another type of export financing.
Actually, the definition of international leasing does not differ from that of normal leasing "a rent with an option to buy". However, they differ by the fact that the goods that are rented are abroad.
simply, the exporter sells to a leasing company the goods that the importer wants to buy and the leasing company leases said goods to the importer. This mechanism is used for goods with a useful life of more than 2 years.
When to use international leasing?
It is usually useful for fixed assets such as durable and semi-durable products, in addition to equipment goods.
What advantages does Export Leasing offer me?
- greater ease for closing sales. Offering a financial solution at the beginning of the sales process means that the initial investment is not so great for the client and the sales process is accelerated.
- Increase in sales and margins. By selling a monthly fee, it allows the customer to justify larger purchases than if they had to pay cash for the equipment.
- Increased customer retention. Offering customer financing options strengthens the relationship and sets us apart from the competition.
Alter Finance and its Export Leasing
Alter Finance helps companies to consolidate and grow internationally, we have existing products and advice to meet the internationalization needs of any type of company.
We are redefining export financing thanks to our Export Leasing service. Creating the largest unique International Leasing platform in the world.
On our platform are leasing companies from more than 50 countries, being able to finance your exports to all those markets.
And now you present us your project? Learn more by clicking on export leasing either Contact us.
References:
https://www.centro-virtual.com/recursos/biblioteca/pdf/pago_riesgo_ci/unidad2_pdf2.pdf
https://www.icex.es/icex/es/navegacion-principal/que-es-icex/sala-de-prensa/videos/categorias-videos/icex-ofrece/VID2018804206.html