Continuing with our educational series on Trade Finance, in this article we look at Import and Export Finance and how it works in international trade.
Moving raw materials, incomplete goods and finished products between trade jurisdictions can be fraught with regulatory complexity, financial risk and business uncertainty.
As a result, many firms refrain from engaging in importing or exporting. However, these activities can also be extremely lucrative; importing can grow revenues and reduce costs, whilst exporting increases firms’ customer base, and therefore their profits.
This leaves many firms in the awkward position of knowing there are profitable international transactions out there for them to conduct, but being unable to free up the capital from their businesses’ existing accounts receivable to invest in them without taking great risks with their companies’ assets and cash flow.
Trade financiers have the tools and the expertise to manage both these issues and help both importers and exporters invest in profitable international ventures.