Export Finance

Enable access to funds quickly without having to wait for overseas customers to pay

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Export Finance Business Funding

If you’re a business owner who is keen to make waves in the international market, you may find that cash flow issues from these international transactions are undermining your progress. If you’re thinking about exporting, or you have a growing customer base abroad, export finance may be the business life line you have been looking for. Export finance is designed to enable companies that export products or services the opportunity to avoid cash flow issues by accessing funds that may be tied up in invoices or outstanding payments.

As with all types of business funding, there are various pros and cons to secured export finance you’ll need to consider:

Advantages Of Export Finance:

  • Quick access to funds: time is money in business, and many companies cannot afford to wait weeks, even months, for a customer to pay an invoice. With export finance, businesses can free up capital in a matter of days.
  • Opportunity for international growth: dipping into international markets can be a daunting prospect, but it can open up some incredibly lucrative opportunities. Export finance provides a solution for businesses who want to export without running the risk of being unable to stay afloat if payments are slow or delayed.
  • Low risk: export finance frees up capital that is tied up in invoices, rather than offering a credit solution, which represents a lower risk strategy for businesses.
  • Credit screening: it can be very difficult and time-consuming for businesses to carry out credit checks on customers overseas. With export finance, a financial provider will take care of this process for you, which saves times and increases security.
  • Prevention of cash flow issues: many businesses succumb to cash flow issues. When you export products, it can take a long time to complete the payment process, and this can leave you short of money. Export finance can help to bridge gaps, enabling you to balance your books.

Disadvantages Of Export Finance:

  • Fees: to provide you with export finance, a provider will charge you a fee, which will impact your overall profit.

What Is Export Finance?

Export finance is a means of enabling businesses that deal with international customers to release working capital that may otherwise be off-limits for a prolonged period of time. Often, when you export a product, it takes time to complete the transaction, and the terms of payment can be convoluted, leading to a process that is drawn-out. It can take longer for businesses to be paid when exporting, and the extended sales window can affect the books. If you’re a business owner waiting on payment for products you exported, the period of time it takes to receive the money you are owed can make a huge difference. In some cases, the delays can seriously compromise the business financially, causing the business to fold entirely.

Export finance can provide a solution for companies that engage in trade with overseas buyers. This is a specific type of trade product, which is designed to facilitate and enable growth by allowing businesses to access funds that would otherwise be tied up in unpaid invoices.

How Does Export Finance Work?

If you’re a company owner and you want to do business abroad, you’ll probably find that the process of selling to buyers in a different country is more long-winded and complex than selling in the UK. However, there are major gains to be enjoyed by selling abroad and tapping into emerging international markets. The lure of overseas buyers can be attractive, but often, there are hurdles that make it difficult to succeed in profiting from exports.

What’s The Process For Acquiring Export Finance?

Acquiring export finance works by providing an approved lender with evidence of the invoices you have sent to an international customer. The lender will review your invoices and then provide you with a portion of the capital. This can usually be done very quickly, within a couple of days, and you can access up to 90% of the total value. Once the invoice has been paid in full by your customer, you will receive the remaining balance. The financial provider will also take care of chasing the invoice payment, and they can also offer additional services, such as credit checks.

Export Finance – FAQs

Export finance is designed to help companies that want to grow their business by trading with overseas clients.

Export finance is an element of trade finance. Trade finance is a term that relates to both imports and exports.

In many cases, it is possible to access funds within 2-3 days once a financial provider has received your invoices. The timeframe may vary according to the individual provider.

There is no universal answer to this question, and different providers may charge different fees. The fee will usually be taken out of the advance payment. Fees affect profit margins, but they do also give you access to additional services, such as credit checking.

If you’re keen to make use of export finance services, you’ll need to contact a financial provider and give them copies of the invoices for which you are awaiting payment. They will provide you with an advance based on the value of the invoice and then contact the customer to arrange for the invoice to be paid in full. Once payment has been received, the outstanding balance will be forwarded to you.

Export Finance For Ambitious Businesses

Whether you are in your start-up phase, are an ambitious business looking to internationally or an established business already trading abroad – export finance can help.

For more information on export finance and other types of funding available for your business, give one of our friendly team a call today on 0800 047 2389 or fill out our contact form and we’ll get back to you.