Things to Consider When Choosing an Export Finance Option

Alternative public financing and export assistance helps small businesses increase their international tradeExporting is a risk but it’s also an opportunity. This is why more and more business entities are venturing out into the international market. But because this move demands more time, more effort, more work and more resources, it’s pretty rational as to why more entities are also seeking export finance options.

However we can all agree that even that is a chore on its own. Not only are there several options which can be pretty overwhelming but we all have varying needs and circumstances. What works for one may not work for others and vice versa. So how do we even pick? What should we consider? We give you a list. Here, check it out and take a look for yourself.

  1. Business Type – The industry and size of your business matters. Let’s admit that there are some options that may not even be available to smaller entities that do not have adequate assets yet. It is important to gauge options while putting oneself at the situation. Know their requirements first.
  2. Purpose – Why do you need it and what for? Options also come in various types and these are uniquely designed to satisfy a certain purpose or function. For instance, others are meant for acquiring a real estate property while there are those that are meant for immediate short term liquidity needs.
  3. Financial Capacity – Know how much you need and you are capable of borrowing and raising. Each business entity has varying capacities when we talk money. Also identify their source. Some export financing are through credit while others are more of an asset transaction.
  4. Length of Term – Apart from satisfying different needs and catering to varying types of industries and sizes of businesses, export finance options also come in either a short term or a long term period. The former takes a few weeks to three years while the latter goes far beyond even reaching up to twenty or more.
  5. Costs – Choosing a type of financing, let alone using one comes with costs either as a fixed rate or as an interest. Each provider also offers varying levels of such costs so make it a point to inquire and look around.

But after finding which export finance solutions works best for your business, what’s next? Of course, you’ll have to look for the best provider but that’s an article for another day.

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