There are several risks that any business working with buyers outside of the United States may experience. These are really no different than what may be a factor with buyers defaulting on payments with domestic sales, but the international legal issues make it a more complex process.
On top of the issues with legal recourse, if there is a default, there is always the issue of going into new markets. This can make it very complex for a business, particularly a small to a mid-sized company where these types of risks can make it impossible to find funding. Unfortunately, banks are often unwilling to consider the potential gain, limiting the ability of the business to expand into the new market.
Help From An Export Insurance Agency
For United States companies selling the US made products and services internationally, the risk of default as well as the ability to increase the terms of payment on orders can be addressed through the tools offered by a top export insurance agency.
These companies can assist with EXIM Bank programs that provide multi-buyer as well as single –buyer programs to benefit the US company. These benefits include protection or insurance against non-payment as well as even risks that may be associated with political unrest in the specific area of the world where the new market is being developed.
Benefits also include the expertise and experience of the export insurance company in completing due diligence and making accurate risk assessments to various buyers.
Additionally, the use of an export insurance agency can allow the business to tap into the funding that is possible through accounts receivables. This allows the business to take an advance on accounts receivables of merchandise or services sold to a foreign buyer before the 30, 60 or 90-day payment terms. It is particularly helpful if the business has extended the terms and is now in a cash flow gap between shipment and payment.
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