Short-term transactions are
those, generally, with payment terms of less than 180 days. The
exporter can choose from several
this type of transaction, ranging from cash in advance to open
account. All of these fall within the spectrum below with increasing
risk to the exporter and decreasing risk to
the foreign buyer as the
type of financing used moves to the right.
Risk of short-term
transactions varies for the exporter and foreign buyer
export credit services provided by the experienced staff at Export
Assist help you to minimize your risk, maximize your cash
and free yourself from documentation hassles so you can receive
payment more quickly and spend more time on your core business
Export Assist has specifically
designed export finance systems to manage your export receivables
by maintaining database information regarding the exporter’s
credit decision on each buyer, continuously updating buyer credit
limits versus invoice activity, notice of due dates and critical
reminders issued on past due invoices. Numerous reports can be
generated in order to fulfill unique compliance requirements by
the credit insurance carrier and the lending institution which
may be loaning against the export receivables.
In addition to management,
our export finance system is integrated to provide the ability
to track international credit insurance, such as multibuyer policies,
and monitor financing received in conjunction with your export
receivables. It can also manage, monitor and report on any international
factoring organization’s factoring guarantee for compliance
Export Letters of Credit
An export Letter of Credit
(L/C) is used to assure the exporter that
payment will be made once the goods have been shipped to the
foreign buyer in accordance with the terms of the L/C, and the
shipping and transaction documents have been accepted by the
issuing bank. The L/C replaces the exporter's credit risk
with that of
the issuing bank.
Export Assist is the premiere processor of Online
Export Letters of Credit. The high level of expertise offered
by our Letters of Credit staff
assures you of consistent and professional service. Plus, our secure,
web-based L/C management system enables us to process and track
your complex documents expeditiously and correctly the first time,
thereby eliminating delays that cost exporters around the world
hundreds of millions of dollars each year.
Whether Export Assist is handling a single L/C transaction or
entire L/C portfolio, you will be able to access your most current,
confidential information on our secure website at any time and
at any internet location around the world.
For a detailed description of our leading edge online service
how it can benefit you, please click here.
Online Documentary Collection
When you ship to a foreign buyer using documentary collection,
Export Assist will prepare the sight or time draft (or bill of
on the buyer, demanding payment for the documents covering the
goods shipped. We then send the draft, relevant shipping documents,
and document instructions to the exporter’s bank which
in turn forwards them to a corresponding bank in the buyer’s
country to initiate payment. Export Assist will track these documents
and notify you when payment is made. Our online web-enabled system
and experienced staff enable us to expedite the process so that
you can receive the payment
Although riskier than Letters of Credit,
documentary collection has the security of the buyer having acknowledged
delivery of the
goods and his obligation to pay by signing the bank draft or
acceptance. Export Assist and the bank are not principals in
the transaction nor do we assume responsibility to insure payment.
Since you are relying solely on the foreign buyer for payment,
we highly recommend that you know the credit strength and reputation
of the buyer before using this financing tool.
With open account, Export Assist acts as your accounts receivable
department to manage your export credit and collections. When
you ship the completed order, we will, on your behalf, prepare
and send the invoice to the buyer requesting payment as per
terms, usually 60 to 90 days. We will also help to oversee the
extension of credit limits and the management of customer receivables.
This type of financing is not uncommon between exporters and
buyers who know each other and who renew their relationship
at trade shows and industry conferences. It is also frequently
used between sister corporations or a joint venture entity which
becomes the buyer.
We do not recommend that open account be
used when you have little or no knowledge of the buyer since it
offers the highest risk to
the exporter. If the buyer does not pay as agreed, the collection
process across international borders is quite difficult and the
opportunity for any recourse is extremely small. The small- to
medium-sized exporter cannot afford to absorb the consequence of
getting paid late or not at all.
If open account is used, we suggest that
some sort of protection, such as international credit insurance
or a factoring guarantee,
be used to provide you with additional collateral.
Insured Accounts Receivable
Whenever your export finance transaction becomes an accounts receivable,
Export Assist recommends looking at credit enhancing it with
international credit insurance to insure its payment by transferring
its risk to an insurance underwriter.
International Credit Insurance
International credit insurance allows the exporter to ship on a
documentary collection or open account basis using a regular
invoice, rather than requiring the buyer to tie up his credit
line by either opening a Letter of Credit or paying cash in advance.
At the same time, international credit insurance offers you the
- Marketing Tool - enables you to extend attractive credit terms
to creditworthy foreign buyers in an effort to increase sales or
open new markets.
- Financing Aid - by insuring international receivables, you can
arrange attractive financing with commercial lenders who take an
assignment of the credit insurance policies and use the receivables
as collateral for loans.
- Risk Mitigation - protects you
against non-payment by the buyer due to both commercial and/or
Export Assist will help you obtain international
either through several large private insurance companies located
here and abroad, or through The Export-Import Bank of the United
States (Ex-Im Bank).
Factoring may increase an exporter’s competitiveness by allowing
shipment on open account while providing guarantee of payment at
time of shipment or when the receivables are due. It can also enable
the exporter to borrow funds more easily by adding a layer of comfort
for the lender.
Export Assist will work with the exporter
to obtain international factoring guarantees from international
factoring organizations in Europe that operate worlwide.