25/04/2012

By Mark Riches, Sales Director, International Trade Finance at Bibby Financial Services

The strength of UK exports is seen by many as central to the economic recovery of the country and with the pound still relatively weak, it is an ideal time for small but ambitious businesses to take advantage.

However, despite the obvious opportunity for expansion, and being told by the Government how important the UK export business is, it has been frustrating for many small and medium sized enterprises that recent banking reforms (such as Basel III) have branded exports as ‘high risk’ business, heavily reducing funding from banks and therefore placing all of that effective ‘risk’ on the SME owners themselves.

Without this support it may seem impossible for many businesses that are breaking into new export markets, or those already established, to maintain their international trade. This means the need for a stable cash flow is imperative to surviving difficult economic times, let alone achieving any growth. This, along with the reality that credit control can take up an unreasonable amount of business time, not to mention the potential language barriers involved of working with international clients, is understandably enough to dissuade any small business looking to branch out overseas.

It seems unfair that entrepreneurial SME owners should be denied the opportunity to maximise on the current potential within UK exports, which may make it reassuring to realise that the funding stream does not flow just from one source. There are several other options for businesses looking to raise finance to develop or sustain international trade, one of which is export factoring.

A specialist form of invoice finance, export factoring is a comprehensive funding and collections service specifically for businesses involved in exporting and releases cash tied up in outstanding overseas customer invoices. Factoring arrangements also include a multilingual credit control and collections service that means businesses can benefit from spending less time chasing customer payment and more time securing new business.

Many invoice finance providers will also employ their own team of experienced, multi-lingual staff, who will chase and collect outstanding customer invoices on the client’s behalf, eliminating the frustration and hassle of dealing with any potential cultural or communication barriers.

If you are looking to manage your export business more effectively, or hoping to venture into international trade for the first time, export factoring could be just the ticket to help you on your way.

Do you trade in other countries and do you want to raise the profile of your company? Then apply for the 2012 International Trade Awards and propel your business into new markets and accelerated growth.

Now in their fifth year, the 2012 International Trade Awards sponsored by American Express Foreign Exchange Services is the only UK wide business awards to exclusively recognise the success of exporters, importers and those trading overseas.


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