*Disclaimer: This post was originally found on export.gov.
All business want to get paid in full and on time. Unfortunately, that isn’t always feasible, especially when your business transactions involve parties located all over the world. When you enter the exciting exporting world and oftentimes buyers will want to work out some sort of financing plan to avoid paying everything up front. Luckily, the U.S. Commercial Service offers two helpful videos that are all about getting paid. Watch the exporting videos for information on the many payment methods and financing options available to U.S. companies beginning to export.
Methods of Payment for U.S. Businesses
There are often many challenges that U.S. exporters face when handling payment transactions with customers located thousands of miles away. Many U.S. businesses new to exporting expect to be paid in full, in advance. You’ll have zero risk of non-payment if you do business this way, but you will risk losing business to competitors willing to offer buyers more attractive payment options. Consider more attractive payment methods like a letter of credit or an open account. These are more appealing to foreign buyers, but make sure to consider export credit insurance when implementing these payment methods to protect yourself in the case of a non-payment issue. Watch this video brought to you by the United States Commercial Service to learn more about payment options when exporting abroad.
Financing Export Transactions
Along with choosing the best payment method, U.S. exporters must consider how they are going to finance their international trade expansion. There are many costs to consider when beginning to export, and most smaller business need some sort of export loan or financing to get started. The U.S. government has many programs available to help U.S. companies sell abroad, specifically through the Export Import Bank, Small Business Administration, Overseas Private Investment Corporation, and the U.S. Trade Development Agency. There are so many options out there to help new exporters enter the global market. Watch the second video in the “Get Paid” set of Exporting Basics videos to get insights on which export financing options are best for your business.