In order to be a success in your export activities, you need
know how to finance your import or export and how to get paid,
when dealing in foreign currencies. Your banker can and should be
a key member of your advisory team. Finding a bank that is
and proficient in providing the various products and servcies required
exporting and importing firms is becoming easier as international sales
become more and more common. The expansion of the internet and
advent of e-banking are also helping to increase the number of banks
companies can work with for their international banking
Products And Services You Should Know About
the industry in which your company operates, there are several products
and services available from major international banks that can
you to get ahead of the competition. Financing and speed are
to any sale and now is the time to look for banks on the leading edge.
companies, commodity companies, capital equipment and consumer product
are the primary users of trade financing products, which include import
letter of credit, export letter of credit, stand-by letters of credit,
collections, trade-related loans, structured and barter
trade. The most common of these is the letter of credit.
Simply put a letter of
credit is a banking mechanism that permits importers to offer secure
of sale to exporters.
In the past,
companies didn't need to know about letters of credit. With the
of international trade, this has changed and even small companies
are coming to utilize letters of credit and other even more advanced
financing services. Knowledge is power and you should learn about
each of these instruments and evaluate if they are applicable to your
particular transaction. Definitions of most of the products such
of credit are included in the Glossary on this website. The
offers both a quick and a more extensive course for learning more about
Letters of Credit and other international financing instruments.
subject is very important both for exports and imports and a visit to
website is definitely recommended.
providing the services above, companies should also expect the
institution to be able to provide products through a web-enabled
portal. Many of the best trade banks are already doing
Additionally, your international bank should also be able to offer
on the following value-added trade products and services such as:
and structured pre-export facilities: these services finance pre-export
fabrication and provide export financing for a country’s key exports.
insurance and guarantee programs: These are available from government
such as Eximbank or private insurers and can help your company spread
offered by regional development banks and institutions: the IFC, ADB,
Bank, and other institutions support international sales by
guarantees as credit support or enhancement.
and import financing: In some countries the export contract can act as
for essential imports. For example, in some countries that export
value-added products (Asia has many), if imports (generally but not
raw materials) do not flow into the country then value-added exports
An international bank can credit-enhance the deal by using the export
as security thus allowing country imports to continue.
management: This allows you to out-source the trade documentation
to others who are more familiar with it and who work with these forms
financings for commodities: Again, these are risk spreading
Examples are trade finance solutions that have interest rate, foreign
and commodity-hedging options. These can be made part of the
transactions: commodities, durable and other goods are essentially
This is a provision of medium-term trade finance where trade contracts
sold into the secondary market.
inter-company structured trade/tax facilities.
of Credit - The International Bank of the Future
dealing globally, the internet is a critical tool for speed and
of communications. One area where it is still in its infancy,
has been in financing international deals. This is
Recently Imperial Bank launched its online SWIFTrade service at www.imperialbank.com/home.asp
The site was in beta testing for two years prior to this so this is a
mature service at this point. With this service, Imperial Bank’s
can obtain a letter of credit immediately and have it seen immediately
those who need to know about it.
in the system is not public and if fact most people wouldn't have
to it. For example, the system can be kept secure by a series of
In the case of imports, the importer can let the person selling to him
the letter of credit online by supplying a password; the exporter then
have to wait to be advised by his bank in his home city and can begin
production immediately. In the case of fast changing market
as fashion or toys, this speed can be critical. The company
the letter of credit can also allow others to view the document such as
freight forwarders, customs brokers or other specialists, so
and paperwork can begin in those areas, as well.
also has an online system for financing. The importing company
fill out an application online at the website.
being enhanced but can already provide the following online services:
electronic copies of letters of credit to the beneficiaries via e-mail;
shippers and other partners of the company acquiring the letter of
to have access to specific portions of the information to speed their
the status of letters of credit;
account activity, even for accounts held with foreign banks.
Major International Banks are already working on systems like SWIFTrade
system described above. Most provide similar services. A
websites to use in searching for international banks is www.qualisteam.com. This website
gives you hotlinks to hundreds of banks around the world. It also
has useful links to many other banking sites. One additional site
that can be very useful to a business seeking information on a
bank or on banking products is www.bankersalmanac.com
Following is a list of international bank websites: