Why Do You Need Export Financing?

Exporting can be a good opportunity for small businesses to enter foreign markets and raise their business globally. To exploit this possibility, it is often necessary to seek Export Financing.

There are various scenarios under which Export Financing may be needed in order to cover costs.

During the initial phase there is a need for investigating foreign markets and investion which takes time and resources.

When doing marketing for their product abroad, Export Financing is needed by exporters that have to attend international trade fairs or trade missions to other countries to translate their brochures or product catalogs in order to advertise in foreign markets, or develop a website to contact potential buyers and travel.

When purchasing or making your products or services developed for export, because once it has received an order from a customer in another country or expects to receive orders the exporter will need working capital or financing to purchase machinery, equipment or property.

Cash flow insufficiency also pushes business to find sources of Export Financing because some exports can take from 3 to 6 months to pay back. Small business need working capital in order to endure this long wait.

But where can exporters find financing? A possible source for Export Financing is one the bank with which it already has an established relationship. If the bank does not have a department of international trade, it can be difficult to get financing for exports. In this case it may be necessary to establish a relationship with a larger bank. But even here, it may be that the bank is not willing to take risks with this type of financing.

If that is the case, you should look into the options provided by the U. S. Government. Export Financing can be offered in the form of loan guarantees that allow your company to obtain funding from commercial banks.

If you are interested in finding more about Export Financing from the US Government, do a little research into options offered by the Federal Agency for the Development of Small Business (SBA). Here we give you some examples on programs that can be useful for you: Working Capital Program for Export by SBA, the International Trade Loan Program, the Normal Program of Loan Guarantees for Business, SBA Export Express, The Export-Import Bank (Ex-Im Bank), The Overseas Private Investment Corporation Overseas OPIC, the Department of Agriculture, and the National Association of State Development Agencies.

Anthony Odiase

www.anodias.com/blog