Trade knowledge / Understanding International Trade Finance
Date: 2013-08-05
Understanding International Trade Finance
In the spring of 2009, at the Export-Import Bank of the United States annual conference in Washington, D.C., President Obama announced the National Export Initiative with the goal of doubling U.S. exports by 2015. To some that may seem like an ambitious undertaking, but consider a few simple facts:
Small businesses account for approximately 30% of export revenues.
Only about one percent of small businesses actually export their products.
Of the small businesses that do export, about half of them export to only one country.
Approximately 95% of consumers live outside the U.S.
As these facts can attest, there is a huge market to tap into, and there are a variety of strategies that small business exporters can follow to produce the desired results. That said, why would a typical small business want to start exporting or increase their current export activity? There are good reasons on both a micro and macro level including:
Extend product life cycle;
Minimize cyclical or season nature of your market;
Develop a source of marginal revenue that both increases total revenues and decreases the fixed cost burden, which improves margins on domestic business;
Create new jobs and new opportunities for existing employees; and
Contribute to supporting the balance of trade.
So there are very good reasons why small businesses should export or expand their existing exports, and there a variety of ways they can contribute to accomplishing the goal of doubling U.S. exports by 2015. That does not mean there aren't challenges to exporting that must be overcome, and the most significant of those challenges normally centers on trade finance.
How does a company finance the production of goods destined for export, particularly if they are bumping up against their current credit limits? How do they determine what payment terms will make their product competitive in international markets, and how do they identify and deal with the related risks? When should they offer terms, and how do they do so without placing their balance sheet at risk or compromising their credit policies?
These are some of the key issues that fall under the umbrella of international trade finance. Because of the variety of issues and tools to address those issues, international trade finance is a topic that needs to be broken up into a series of articles that address each of these specific areas. The logical break is between pre-export finance programs to finance production destined for export, and post-export finance that addresses methods of payment, risk mitigation and financing tools.
1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"TradeBearings".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
