What are the advantages of Export Finance?
Enhanced Cash Flow
Export finance provides immediate access to funds, allowing exporters to bridge the gap between the shipment of goods and receipt of payment. It helps to improve cash flow by providing working capital that can be used for production, inventory, and operational expenses.
Mitigation of Payment Risks
Export finance instruments such as letters of credit, export credit insurance, and export factoring help mitigate payment risks associated with international trade. Exporters can protect themselves against non-payment or delays in payment, thereby reducing the risk of financial losses.
Increased Sales and Market Expansion
Export finance can facilitate sales growth by providing financial support to explore new markets and seize business opportunities abroad. It enables exporters to offer attractive payment terms to foreign buyers, making their products more competitive and appealing.
Increased Working Capital Availability
Export finance can provide working capital facilities, such as export prepayment and export factoring, allowing exporters to access a percentage of the invoice value before actual payment is received. This helps to support ongoing operations, fulfil new orders, and manage cash flow more effectively.