Trade Finance Guide

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TABLE OF CONTENTSIntroduction .....................................................................................3Methods of Payment in International Trade.....................................4Cash-in-Advance ............................................................................7Letters of Credit ............................................................................10Documentary Collections .............................................................13Open Account ...............................................................................16The Export-Import Bank WorkingCapital Program ............................................................................21Export Credit Insurance................................................................24SVB’s Asset Purchase Program (APP) .........................................27Forfaiting .......................................................................................29Government Assisted Foreign Buyer Financing ...........................32Export Working Capital Financing ................................................19For more information, please read the U.S. Department of Commerce’s new “Trade Finance Guide: A Quick Reference for U.S. Exporters.” How to Obtain Copies: TheTrade Finance Guide is available online for download at www.export.gov, the U.S. government’s export portal. Printed copies are available from the Trade Information Centerat (800) USA-TRADE.Trade Finance Guide 2
INTRODUCTIONIntroductionMethods of Paymentin International TradeCash-in-AdvanceDocumentary CollectionsOpen AccountExport Working CapitalFinancingExport Credit InsuranceSVB’s Asset PurchaseProgram (APP)ForfaitingLetters of CreditThe Export-ImportBank Working CapitalProgramsGovernment AssistedForeign Buyer FinancingThis guide is designed to outline the common techniques of exportfinancing and to provide our Silicon Valley Bank (SVB) clients with anoverview of the services we provide for our clients selling overseas.Benefits of ExportingNinety-five percent of the world’s consumers live outside of theUnited States, so if you are only selling domestically, you are reachingjust a small share of potential customers. Exporting enables smalland medium-sized exporters (SMEs) to diversify their portfoliosand insulates them against periods of slower growth. Free tradeagreements have opened in markets such as Australia, Canada,Central America, Chile, Israel, Jordan, Mexico, and Singapore,creating more opportunities for U.S. businesses.TRADE FINANCEOffers a means to convert export opportunities into sales bymanaging the risks associated with doing business internationally,particularly the challenges of getting paid on a timely basis.Opportunities° Helps companies reach the 95 percent of non-U.S. customersworldwide° Diversifies SME customer portfoliosRisks°°Nonpayment or delayed payment by foreign buyersPolitical and commercial risks; cultural influencesTrade Finance Guide 3
Page 1: Trade Finance GuideA guide and over
Page 5 and 6: METHODS OF PAYMENT ININTERNATIONAL
Page 7 and 8: CASH-IN-ADVANCEIntroductionMethods
Page 9 and 10: CASH-IN-ADVANCEIntroductionMethods
Page 11 and 12: LETTERS OF CREDITIntroductionMethod
Page 13 and 14: DOCUMENTARYCOLLECTIONSIntroductionM
Page 15 and 16: DOCUMENTARYCOLLECTIONSIntroductionM
Page 17 and 18: OPEN ACCOUNTIntroductionMethods of
Page 19 and 20: EXPORT WORKING CAPITALFINANCINGIntr
Page 21 and 22: THE EXPORT-IMPORTBANK WORKING CAPIT
Page 23 and 24: THE EXPORT-IMPORTBANK WORKING CAPIT
Page 25 and 26: EXPORT CREDITINSURANCEIntroductionM
Page 27 and 28: SVB’s Asset PurchaseProgram (APP)
Page 29 and 30: FORFAITINGIntroductionMethods of Pa
Page 31 and 32: FORFAITINGIntroductionMethods of Pa
Page 33 and 34: GOVERNMENT ASSISTEDFOREIGN BUYERFIN
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