Understanding Export Credit – Your Key to Global Success

Ever dreamed of taking your business global?
Exporting your products can be a fantastic way to expand your reach and boost your profits. But navigating the financial aspects of international trade can be tricky. That’s where export credit comes in!

What is Export Credit?

Think of export credit as a helping hand from your bank. It’s a borrowing facility that finances the costs involved in exporting your goods, from production and transportation all the way to receiving payment from your international customer.

Here’s a breakdown of how it works:

• Specific Credit Limits: Your bank assigns you a specific credit limit to ensure you don’t overspend.

Let’s Get Interactive!

Think about your export business:

• What type of goods do you export?
• What are your typical production and shipping timelines?

Knowing this will help you choose the right type of export credit.

Pre-Shipment vs. Post-Shipment Finance:

Export credit comes in two stages:

• Pre-Shipment Finance: This helps you cover expenses before your goods are shipped.expand_more It’s like a loan to get your production rolling.
• Post-Shipment Finance: This kicks in after your goods are shipped and helps bridge the gap until you receive payment from your customer.expand_more

Pre-Shipment Finance Options:

• Running Account Facility: This is a flexible option that allows you to draw funds as needed, like a credit card.
• Order Account Facility: This is specifically for a single export order and provides a one-time loan for production and packing.

Ready to Choose?

Take this quick quiz to see which pre-shipment option is right for you:

(Include a short quiz with two or three questions about the nature of the exporter’s business and their typical export timelines. Based on the answers, recommend the most suitable pre-shipment option.)

Post-Shipment Finance Options:

Once your goods are shipped, export credit helps you get paid faster through:

• Purchase/Discounting/Negotiation of Bills: Your bank pays you a percentage of the invoice value upfront, then collects the full amount from your customer.

Let’s Get Practical!

Imagine you’ve just exported a shipment worth $10,000.

• How much upfront payment would you like from your bank through post-shipment finance?

The answer will depend on your cash flow needs.

Beyond the Basics:

This blog post is just a starting point! Export credit can be customized to your specific needs. Talk to your bank about the different variants available, such as:

• Running Account: Similar to the pre-shipment option, but for post-shipment financing.
• Order Based: Specific to a single export order for post-shipment financing.

Ready to conquer the world of export? Contact your bank today and explore how export credit can fuel your global ambitions!