Export finance refers to a business funding arrangement which is designed to facilitate international sales. A good export finance solution will not only help the seller to cover the cash flow gap between shipping goods and getting its invoice paid, but will also seek to de-risk the process and smooth the bureaucracy.

The actual financial arrangements involved in export financing can vary. In some cases, pre-shipment export finance allows a firm to raise money in order to complete the order, long before an invoice can be sent. On the other hand, invoice discounting and export factoring depend on an invoice being issued, but can be designed not only to speed the payment but to guarantee it as well.

Why is Export Finance Important?

Moving into foreign markets is a major milestone in the evolution of any business. Exporting multiplies your potential customer base by a large factor; opens up the possibility of working with large multi-nationals and offers lucrative partnerships with overseas re-sellers.

At the same time, your first export order is a major step up in terms of risk, paperwork, and cash flow impact. It’s a daunting prospect for many and even large, experienced international trading companies need to have specialist funding and insurance arrangements in place.

Building a Smart Export Finance Package

There are two crucial roles that export financing should play: it should mitigate the cash flow impact of the sale, allowing the seller to retain enough working capital to continue its domestic operations; and it should protect the company against the risk or non-payment or dispute.

The latter can be a headache even for domestic sales, but when it comes to international trade it is very difficult for firms to undertake due-diligence and pursue bad debts alone. Debtor finance (also called cash flow finance) solutions such as invoice discounting can see the finance provider take on the risk and responsibility for getting the invoice paid – this funding arrangement is known as ‘non-recourse’.

The advent of fintech means that suitable export funding has never been more available to Australian firms. Businesses can now build their own tailored smart funding solutions: for example, use of both Trade Finance and non-recourse Invoice Finance can practically do away with the cash flow gap without any risk or security requirement to the business or its owners.

Sophisticated, smart business funding solutions such as these are what OptiPay specialises in. OptiPay’s sales solutions staff can build a tailored export finance package, working with our experienced partners to smooth the way to overseas sales. Exporting is a huge growth opportunity for businesses and we are delighted to smooth the way with our export finance offer.
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