INFORMATION ABOUT BANKING PRODUCTS AND SERVICES

KNOWLEDGE ABOUT BANKING SERVICES

In order to be a success in your export activities, you need to know how to finance your import or export and how to get paid, especially when dealing in foreign currencies. Your banker can and should be a key member of your advisory team. Finding a bank that is comfortable and proficient in providing the various products and services required by exporting and importing firms is becoming easier as international sales become more and more common. The expansion of the internet and the advent of e-banking are also helping to increase the number of banks that companies can work with for their international banking requirements.

Banking Products And Services

Depending upon the industry in which your company operates, there are several products and services available from major international banks that can help you to get ahead of the competition. Financing and speed are integral to any sale and now is the time to look for banks on the leading edge. Multinational companies, commodity companies, capital equipment and consumer product producers 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 terms of sale to exporters.
In the past, most companies didn't need to know about letters of credit. With the expansion of international trade, this has changed and even small companies increasingly are coming to utilize letters of credit and other even more advanced international financing services. Knowledge is power and you should learn about each of these instruments and evaluate if they are applicable to your particular transaction. This subject is very important both for exports and imports and a visit to the website is definitely recommended.
In addition to providing the services above, companies should also expect the financial institution to be able to provide products through a web-enabled delivery portal. Many of the best trade banks are already doing this. Additionally, your international bank should also be able to offer information on the following value-added trade products and services such as:

1. Prepayment and structured pre-export facilities: these services finance pre-export fabrication and provide export financing for a country’s key exports.
2. Export receivables financing.
3. Government-backed insurance and guarantee programs: These are available from government bodies such as Eximbank or private insurers and can help your company spread the risk.
4. Programs offered by regional development banks and institutions: the IFC, ADB, World Bank, and other institutions support international sales by providing guarantees as credit support or enhancement.
5. Linked exports and import financing: In some countries the export contract can act as security for essential imports. For example, in some countries that export value-added products (Asia has many), if imports (generally but not always raw materials) do not flow into the country then value-added exports stop. An international bank can credit-enhance the deal by using the export contract as security thus allowing country imports to continue.
6. Global trade management: This allows you to out-source the trade documentation preparation to others who are more familiar with it and who work with these forms daily.
7. Option-linked financings for commodities: Again, these are risk spreading options. Examples are trade finance solutions that have interest rate, foreign exchange, and commodity-hedging options. These can be made part of the transaction if desired.
8. Counter-trade transactions: commodities, durable and other goods are essentially bartered.
9. Forfeiting: This is a provision of medium-term trade finance where trade contracts are sold into the secondary market.
10. Multinational inter-company structured trade/tax facilities.