March 2018
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  • export-financingExport finance is known to have helped so many companies who only then dreamed to expand and bring their brands to the international scene. If you’re planning to tap export financing to make your expansion dreams come true, here’s a little rundown on what you have to get ready for. Like any other financing option, providers will demand a number of prerequisites. Check out the list of requirements that most providers will have you prepare for.

    1. Books and Financial Documents

    Because receivables are involved, specifically export sales invoices, providers will want to take a look at the company’s books. They may want a rundown on credit sales procedures and terms to ensure that the business practices strong, efficient and reliable controls. At some point, certain providers may also want to see the financial standing of the business through its reports and statements.

    1. Goods and Services

    Exporting sounds exciting but it’s not all bread and butter. There are challenges and one of that would be making the actual sale. Will your offerings be marketable enough to garner profits? Will an importer be interested? Moreover, can you really render the goods and/or services that you promise you would? Because export finance involves providing an advance to the sales invoices, providers will first want to know if you can deliver. Because if you can’t, why would the importer pay?

    1. Customer Creditworthiness

    It is important that your client actually pays or has a good credit history. Do they take too long to pay or don’t they pay at all? Unlike traditional loans where the financial institution will look into your credit score, financial standing and require collateral, this medium will necessitate that customers possess a good credit score.

    1. Customer Financial Standing

    Can they really pay their dues or will they ultimately lead to bad debts? Providers will want to know. After all, they’re the ones collecting from them and buying the rights thereto. It would be a huge loss on their part so it’s no surprise if they will demand for a background check on the customer to whom the invoice is attached to.

    1. Export Receivables

    Of course, export finance will not be possible if there are no international or foreign credit sales to begin with. These receivables will have to be validated and double checked to ensure that they are indeed binding, particularly on the owing client’s part.

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  • spot-factoring-companiesCash is required to run a business. After all, you can’t expect to do so with liabilities alone. That would be a recipe for disaster and it sure wouldn’t make your venture look pleasing in the eyes of investors. This is why entrepreneurs take time to carefully study their options when it comes to raising financial resources. For a good number of entrepreneurs, this is accomplished with the help of spot factoring companies. But what do they do and when will you need their services? Here, take a look.

    When traditional loans are too expensive and restrictive…

    Not all companies can afford traditional credit options like bank loans and mortgages. They’re not only expensive and hard to apply for but they also come with low approval rates for many startups and small to medium scale enterprises. Moreover, the funds to be issued, if approved, are often restricted in terms of use which can be very limiting for a lot of borrowers.

    When collateral is required…

    Majority of financing options in the marker will require some sort of collateral, oftentimes a property or similar other valuable asset. Most companies wouldn’t want to risk both their commercial and personal assets if the worst happens. Spot factoring is a method that does not require any collateral as the invoice itself will suffice as a form of security.

    When there’s a need to hasten collections…

    Companies will want cash earned from sales to be reinvested back into the entity. But this cannot happen if trade receivables are left unpaid or at least hasn’t matured yet. In a usual scenario, a customer buys on credit which will bring about an invoice. This invoice will mature on a specific date and it comes with terms by which the customer is legally bound to pay. It therefore delays the actual receipt of cash thereby also deferring its reinvestment and use in the business. With the use of spot factoring, collection is hastened by virtue of the advancement of the invoice’s value.

    When cash flows need to be improved…

    Just because your sales are high doesn’t mean more cash for the company. Oftentimes, cash is locked up in customer invoices. This creates a negative impact on cash flows as more disbursements compared to what flows into the system. With spot factoring companies advancing the value of the said invoices, cash flows levels are improved and so are liquidity and working capital.

    Visit to learn more about spot factoring.

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