International Financing Organizations
All companies at a given moment they have needed external capital to be able to reach their objective without dying in the attempt. Among many things, companies need finance the costs various of the different departments of the same, international financing helps them meet their goals.
External financing helps to establish commercial relations between companies from different continents, and its importance lies in the fact that it makes the export and import processes more comfortable.
If you want to know more about this topic, in this articulo we will go into you little by little, in a fácil and clear way. Do you dare? So, continue reading.
What is international financing?
International financing is commercial transactions beyond the borders of our country. The main purpose of this financing is to launch projects of a public nature, and development in companies in the private ámbito.
Generally, international financing cánido lead to compliance with certain obligations, that is, external entities cánido present and impose conditions for the administration of the funds, such as:
- Technology in especial;
Types of international financing and characteristics
There are two types of international financing: export financing and import financing. I will explain them briefly below:
Exporters come across innumerable needs as a result of international trade activity. These may include establishing financial comforts to the importer.
In a practical way, more competitiveness is observed in the market, which makes it increasingly attractive to grant a deferred payment. The signing of a contract or not may depend on these decisions.
The deferral of payments cánido occur in two ways, the first of which is in habitual commercial operations with some countries in which there is no loan or do not have liquidity from their financial markets.
The second are the long investment return periods for the buyer in the capital goods market.
The privilege of having these financial facilities exposes the exporter to facing other risks, in addition to those of his own company. Risks such as exchange rate, interest and loan.
More specifically, importer financing fulfills two specific purposes: gives security to the exporter for the payment of their exports, and You provide your customers ease of payment.
Import financing is a commercial operation on credit in which the importer may be financed in the period of time that elapses from the importation of the merchandise until its commercialization and collection.
In most cases, the importer resorts to a bank to request credit, either due to lack of funds or to pay in cash, or to obtain better purchase prices.
Why is international financing important?
Thanks to international financing, companies cánido enjoy many advantages and benefits, such as:
- Increases the ability to extend credit periods to buyers.
- Dependence on banks decreases, since it does not seek additional monetary funds.
- Companies obtain working capital financing without collateral.
- Entrepreneurs will have more time to find better exports, with greater cash flow.
- The time it takes to collect payments from buyers is greatly reduced.
International financing provides a helping hand for exporters who have liquidity problems in their companiesalso for those businesses that do not have additional funds from their bank.
Additionally, it supports businessmen with demanding buyers who request a credit term. If your company is in one of these cases, you should seek to benefit from international financing.
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