Export 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.
- 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.
- 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?
- 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.
- 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.
- 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.