Export Finance is a service used by companies trading overseas to bridge the gap between sending goods and recieving payment from their customer.
Business transactions within the same country often have payment terms of 90 days, which alone can cause cash flow problems for business owners. In the export industry, however, the wait for payment can often be as long as 180 days.
This is because payment terms for export invoices don’t kick in until the goods are received. This alone can take up to three months.
All of which means potential cash flow hold up for the supplier. If not managed properly, they can even lose profit on their transaction.
Why Use Export Finance?
Export Finance is a way for a supplier to get paid instantly for the goods they send overseas. Once they have a purchase order and have issued their invoice, they can send these documents to a financier and receive a percentage (usually up to 80%) of the invoice amount immediately. This keeps cash flow moving, increasing buying power and allowing the business owner to make their own payments on time.
One other potential pitfall when exporting is the unreliability of the customer. It can be difficult to determine this from overseas, and if something does go wrong it can be much harder to conduct legal processes to recover money.
Some export finance companies will offer a guarantee, stating that in the case of ‘bad debt’ (a non-payment), a business owner will still receive a percentage of the loss.
This can help remove the risk from exporting and give suppliers the confidence to grow their business into overseas markets.
How Jardine Norton Can Help
We offer a fast, flexible export finance service to help businesses expand into global markets.
Benefits of our Export Finance Service Include:
No Risk of Bad Debt – We won’t ask you to return the money we’ve funded you – even if your customer doesn’t pay.
No Credit Checks – The state of your finances does not affect our decision to say yes.
No Tie-Ins. Your business has the flexibility to use us as and when you need us.