EXPORT INVOICE

DISCOUNTING

If as an exporter you are facing a cash crunch in your business which in turn does not allow you to process new export orders, you are unable to secure additional funds from your bank because they are demanding collateral or organized financial statements, your buyers can’t be persuaded to pay in advance and you have to offer flexible payment terms to keep them convinced, then your business will benefit from Trade Finance.

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Frequently asked questions

Export Invoice Discounting

What is Export Invoice Discounting?


Export finance helps exporters to offer credit to their buyers. This means that they can offer "ship now, pay later" terms to buyers - and this is what buyers want. Export finance is provided by a lender:

  • Lender pays you, the exporter, in cash when you ship the goods.
  • The buyer, somewhere else in the world, pays the Lender later.
  • Lender takes the buyer credit risk, and you do not have to wait for the money.
  • This improves your cash flow, reduces your risk, and allows you to win bigger orders from your buyers.




Key features of Export Invoice Discounting.


Payment term: agree how much time your buyer wants before he should pay for the goods that you ship him. Buyers like to be offered the chance to receive the goods and then to pay later. This shows the exporter has confidence in his products, and allows the buyer time to sell the goods, which helps his cash flow. Price: agree the charge with the Lender. Rate of Interest varies from 6% to 11% p.a.




How much Collateral is required?


There is no requirement for any collateral. All that is needed is to assign the Invoice in favour of the Lender discounting your Invoice.




Benifits of Export Invoice Discounting


  • You will be able to raise finance without having to put up any collateral.
  • In the event the buyer defaults on payment, you are not liable.
  • You will be in a position to increase your sales as you will be selling on open credit or D/A terms. There will be no need to ask your buyer to pay in advance or to open an LC.
  • You will get money upfront – your cash flow will improve.




What is Non-Recourse Export Discounting?


Non-recourse export financing provides you with immediate cash against the invoices that you raise on your international buyers. You do not have to bear the risk of buyer default. When you raise an invoice on your overseas customer, the advance up to 80% of its value to you within 24 hours of submission of the relevant documents.





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