International Finance

Running head : EXPORT FINANCING

Export Financing

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Export Financing

A country 's finance and trade are no longer exclusive within its self only . Economy is increasingly being played at an international level with countries importing and exporting its products to cities and countries on the other side of the world . Export financing further brings countries closer by enabling businesses to sell their products to foreign markets . Export financing refers to loans given to exporters to allow them to ship products outside their own country

or region . It is the financial backing provided for companies to start up business relations overseas through competitive international finance credit terms . Businesses interested in borrowing funding from their governments or private organizations have several options . Putting to mind what they believe is suitable for their financial capability and profit-costs goals , they can choose from the different forms of export financing such as banker 's acceptance , discounting , factoring , and forfaiting

Banker 's Acceptance (BA ) is a time draft or bill of exchange accepted by a bank . The bank is then obligated to pay the draft 's holder the specified amount at the stated day . Businesses engaged in international finance see the BA as a safe , short-term credit investment guaranteed by banks . BA is beneficial as it allows traders to substitute their credit standing with that of bank 's . This can be a useful tool for traders to prove their credibility when they enter the international market for the first time or do business...