Finance will impact your international business in a variety of ways. Some are structural (e.g. you AND YOUR BANK have to understand and transact Letters of Credit and international wires (incoming and outgoing) should be routine and processed through an Multi-currency account.)
Others are competitive - you will face companies from other countries whose governments aggressively subsidize their efforts - often at below market rates and with favorable conditions.
And some will be limiting - access to working capital to produce that huge export order can be problematic for some companies; often buyers overseas are ready and eager to order, but unable to finance their purchase locally; and in cases where an L/C is not feasible, knowing how to evaluate your receivables risk exposure (with very little chance of recovering) is not only functionally impossible, but terrifying (at least on the large exciting orders!)
It's darn frustrating. But here's a newsflash! The practices of international business are set for reasons of expediency and tradition. You aren't going to change the cumbersome process of L/Cs.
And you aren't going to affect the practices of other governments. (Although it is worth noting that a. the US Government is aware of it [read Ex-Im Bank President Fred Hochberg's comments on state-directed capitalism" here] and b. the Consilium Model which vertically integrates various services including ongoing work on your behalf with the DoC's Trade Advocacy Center and Market Access & Compliance Desk Officer is designed to ensure your company has a meaningful profile with US Government resources and will put you in a substantially stronger position to counter these anti-competitive practices of exporters from other countries.)
Big....and now more nimble
But the Ex-Im Bank has recently appeared to match the "chitter chatter" of the National Export Initiative's objectives of service availability, response, competitive positioning and integrated solutions with the "pitter patter" of actually innovative and helpful programs under the umbrella of "Global Access."
In recent months:
- The Ex-Im Bank has established and published formal metrics for it's success in supporting new export activity
- Established "Express" procedures for "named buyer" credit insurance
- Introduced a "Supply Chain" Finance Guarantee Program
- Established the "Global Access" program
Additionally they have revamped the portal for SME access and deliberately enhanced inter-agency cooperation.
The primary services of Ex-Im Bank remain the same:
- Provide financing guarantees for working capital loans to allow US exporters to fulfill orders
- Provide lending services to foreign buyers to facilitate their purchase of US exported products (or financing against export receivables for US companies)
- Provide export credit insurance to US exporters
Tools worth using
These aren't just some bureaucrat's "check the box" attempt at "helping." These are real, meaty tools which are sure to address some of the export roadblocks which have hindered SME's global business development....and they are now delivered by an Ex-Im Bank with an apparent genuine "customer focus."
Rather than just read the brochure, though, make sure that your bank works with SBA (a number of complementary solutions to Ex-Im Bank's) products as well as Ex-Im's and have one of your bank's experts sit down and explore how those products could help you expand. If your bank doesn't work with SBA and Ex-Im products, and you are serious about growing through exports, you need to find a different finance partner. It's that simple.
Interested in learning about how Consilium can assist your company? Call me.