How is financing service exports different from financing product exports?
Are there special tactics to consider? A. Financing service exports presents special problems because there often is no tangible asset for a lender to secure. Therefore, small service providers must look to other ways of raising cash to finance their international sales. Among the alternatives are — • Internal financing, including extended payment terms from suppliers, payment in advancefrom customers, mortgage refinancing and equipment refinancing • Equity financing, including investment from venture capitalists, private placements,Small Business Investment Companies and public stock offerings Service exporters should explore using advance or progress payments when negotiating an international sale. Progress payments not only benefit the exporter’s cash flow but can provide assurance to a buyer that the service will be delivered as promised. Procurement opportunities for small business exporters also are available through Multilateral Development Banks (MDBs): • World Bank, phone: (2
Are there special tactics to consider? A. Financing service exports presents special problems because there often is no tangible asset for a lender to secure. Therefore, small service providers must look to other ways of raising cash to finance their international sales. Among the alternatives are – • Internal financing, including extended payment terms from suppliers, payment in advancefrom customers, mortgage refinancing and equipment refinancing • Equity financing, including investment from venture capitalists, private placements,Small Business Investment Companies and public stock offerings Service exporters should explore using advance or progress payments when negotiating an international sale. Progress payments not only benefit the exporter’s cash flow but can provide assurance to a buyer that the service will be delivered as promised. Procurement opportunities for small business exporters also are available through Multilateral Development Banks (MDBs): • World Bank, phone: (20
