sources of financing
9: Obtaining finances/resources for your export >
Alternative sources of frinancing
There are several alternative sources of
financing. For example, the industrial Development Corporation
provides financing for capital and other types of exports.
The Small Enterprise Development Agency (SEDA) provides
financing for small businesses and there is no reason
why this should not include small exporters. Various regional
development agencies provide financing for local firms
and you might want to consider these.
Getting buyers and suppliers to help
Do not loose site of the possibility of
the buyer helping to finance the sale. To begin with the
buyer (particularly when buying capital goods) may be
prepared to out down a deposit to help finance the deal.
In addition, they may be prepared to make periodic progress
payments based on a third-party report or some other confirmation
that certain agreed-upon percentages of the project have
Similarly, your suppliers may be willing
to extend credit to you if you can assure them of the
export deal. The credit you receive from your suppliers
will certainly help in financing the project, although
they will expect some reward for assisting you in this
way (usually in the form of a higher payment or interest
charge on the value of the goods they supply you).
Using export intermediaries to help finance your exports
If you are a small exporter and simply cannot
find the money to finance your export project, you could
turn to an export agent or an export trading house (also
referred to as export trading companies) to help you.
In this instance, they would probably take over the deal
completely and may simply pay you for the goods which
they would then sell to the importer making whatever mark-up
they choose (even though you may have made the effort
to find the customer). If financing is required, they
may be in a better position to obtain the financing required
to cover the export sale, but they would expect a substantial
reward for their involvement and your profits are likely
to be cut quite substantially.