Money money money – it’s at the heart of every business and the word on many people’s minds. It can be the make or break of a business so it’s important to minimise any risks when dealing with exporting.
That’s why we’re revealing our tips on exporting finance – including the risks involved and any funding that could be available to you. Go on, open up a whole new world and go global.
When exporting from the UK to another country, it can be daunting figuring out exact payment details. There are many things to consider such as which currency you’ll invoice in and any additional charges. That’s why it’s important to tackle this subject early on.
Wavering exchange rates can be troublesome when it comes to receiving payments – with the rates are constantly changing, how do you know how much you’ll get paid? To make your payments a bit more secure and stable, why not set the exchange rate on the day the payment is scheduled? This way, you’ll know there’ll be no further fluctuations and you’ll know exactly how much you’ll pocket.
Additional charges can cover any losses you may have encountered from rising and falling exchange rates. You can also invoice in pounds – but this might make you less competitive to the buyer.
When will you be paid?
There is nothing worse than late payments. But luckily, there are a few ways to deal with international transfers to make sure everything runs smoothly.
Payment before shipping is a safe option – especially if you are dealing with a new buyer. It’s a great way to establish trust, and once you’ve received the money you can focus on transporting the products abroad.
You can also take payments after you’ve shipped products, but this option is probably best if you have been dealing with the buyer for a while and are able to trust them.
But what if a buyer is unable to provide payment at any given time? This is where letters of credit come in. A letter of credit is basically a guarantee from the buyer’s bank that they’ll pay on behalf of the buyer if they’re unable to do so themselves.
This offers maximum security to both the buyer and the seller – the only downside is that there may be a longer wait to get paid due to processing. Find out more about letters of credit here.
What funding is available?
Confused about funding? Help is at hand. We want to make sure your business will succeed – that’s why there’s tons of financial help available for exporting businesses. Your bank should be able to help you with things such as loans and guarantees but, if not, you can apply for government funded finance from UKEF (UK Export Finance). They offer similar services to your bank, such as:
– capital loans
– payment insurance
WMIT also delivers the SME International Growth Project. This is a European Regional Development Funded (ERDF) programme, which aims to support small and medium sized businesses by helping them to grow internationally. Eligible businesses can also apply for a match-funded grant of £3,000 to support their export plans.
There are loads of avenues to explore with exporting. With so many possibilities and so much help available, what are you waiting for? Get started by contacting us on firstname.lastname@example.org or 0345 222 0159.