Step 8 | Financing
While there are overnight export success stories, most companies must be prepared to invest both time and financial resources to see the return on their investment and the subsequent success. Consequently, financial stability and a secure cash flow are important during this period. In some cases, businesses can rely on their domestic sales to sustain their early export efforts. If this is not possible, it is a good idea to know what financing options are available. Exporters must develop a financial plan to understand and address the diverse costs associated with exporting, complete with a two- to three-year cash budget to cover expenses and a capital budget. A capital budget is a cost-benefit assessment of your export objectives and serves as your operating plan for measuring expenditures and revenues.
Also important is the guide “How to Access Trade Finance” – A Guide for Exporting SMEs : This is a Guide developed by ITC and provides the SME manager with key advice on how to understand bank requirements, prepare a bankable proposal and a solid business plan, conduct better negotiations with banks, and use banks to boost their competitiveness. The publication also describes how to develop a relationship between a new breed of bankers and SME managers. These are bankers who are ready to work closely with the SME community to understand their needs and provide new solutions.
Take a look at our short guide on: