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Finance for exports

Finance for exports

Your checklist

Set your export budget

It's important to be aware of the financial implications of operating overseas – from payment terms to currency considerations and tax.

The export budget within your export plan should set out all the costs you are likely to incur in entering and developing your selected markets.  

Your budget should also take into account when you are likely to receive payment for your goods and services from each market you are targeting. This will allow you to manage your company cash flow and identify any export finance needs. 

In the short term, your company will likely have a number of additional upfront costs, such as marketing and sales costs, delivery costs, and any product or service adaptation required for exporting to new countries.

Funding for export operations

Export finance can support your company by helping you meet any upfront costs in developing overseas sales, helping improve cashflow and working capital available to you company, and helping you receive payment earlier for completed sales. 

Export finance can also help you to offer better payment terms to your new customers and so make you more competitive in the market.

Find the best finance option for your business 

If you’re considering expanding into international markets, we can help you work out the best options for your business. Our Finance Readiness specialists work with Scottish companies to find the right route to funding for them. 

Contact a specialist

We have also published a series of guides explaining different funding options and what you can do to become investor-ready. 

Research funding options and preparatory steps

Alongside discussing your export finance options with your bank (which may offer tailored finance options for exporters), your company may qualify for government-backed finance through UK Export Finance (UKEF). UKEF are the UK’s export credit agency and support UK exporters across a wide range of sectors. They can help companies:  

  • win export contracts by providing attractive financing terms to their buyers 
  • fulfil contracts by supporting working capital loans  
  • get paid by insuring against buyer default 

Other useful resources 

A number of other organisations provide helpful support if you’re thinking about applying for finance to help you grow your export capabilities. 

Search the British Business Bank’s Finance Hub for financial options and regional support specific to funding export growth. They have also published guidance for businesses experiencing financial challenges as a result of COVID-19.

Read Trade Finance Global’s guides on trade finance for imports or exports and how receivables and invoice finance can help release working capital earlier in the trade cycle. 

Watch this webinar by Open to Export and Bibby Financial Service on how to raise export finance using the value of your invoice.

Support may also be available from Exporting is GREAT partner companies and organisations.

Ensure payment for your goods and services

There are a range of payment options for selling your goods into international markets. You'll want to:

  • Ensure you are competitive in the market
  • Generate the required cash flow 
  • Minimise the risks of any non-payment for goods or service

But how do you decide the best approach for your company? 

  • You need to make sure your export buyer is creditworthy
  • Decide if you'll put in place credit terms for your new customers, and
  • Which currencies you will accept payment in

Further information on payment options for overseas selling is available in our Trading with international markets section. You can also get direct advice on export payment methods and credit insurance from your bank, and Insurance broker, UK Export Finance and the Scottish Chambers of Commerce.

Finance tips for international markets

1. Plan ahead and think about future trading in the market 

For example, do your business to consumer (B2C) price points contain sufficient margin to allow for a future trade discount without impacting adversely on your cash flow?

2. Set minimum order quantities

If you're selling business to business (B2B), and using price discounting, it's advisable to set minimum order quantities (or quantities at which further discount applies) for trade customers in relation to practical ‘break points’ e.g. in carton size / weight / shipping costs.

3. Manage exchange rate fluctuations 

If quoting/pricing in the local export market currency, you need to be aware of and manage exchange rate fluctuations and risk.

4. Factor in payment/credit terms

For cash flow purposes, make sure you are aware of, and factor in the normal payment terms or credit periods for goods in each export market, which can differ significantly between markets.

5. Credit check your customers

Make sure that any export customer is creditworthy before offering any credit terms. A wide range of financial information is available from credit information agencies and major credit insurers, or through our free international market research service.

Contact us

Got any questions about funding for expansion into new markets? Our team are here to help.

Disclaimer

All information provided on this web page is for general guidance only. The contents of this guide have been provided by our training partners, Upper Quartile. Upper Quartile is not affiliated with any of the third parties or listings represented on our website. Third party listings are drawn from public domain and industry body data sources. Due diligence on a given third party or listing remains the exclusive responsibility of the end user. Whilst every effort is made to ensure the accuracy of the details represented, Upper Quartile and Scottish Enterprise cannot endorse, recommend or accept responsibility for any transactions conducted between the user and a given third party or listing provided on this web page.