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FINANCIAL MARKET COURSES

Export Finance

International trade presents a spectrum of risk, relating to uncertainty over the timing of payments between an exporter and an importer. Furthermore, in an increasingly globalized marketplace exporters must offer competitive sales terms to their customers. This includes payment terms that strike an appropriate balance between the risks of international trade.

 

This course looks at how exporters can offer flexible payment terms that strike a balance between their interests and those of importers. It builds on knowledge of basic trade finance tools (such as letters of credit) by exploring trade finance techniques that mitigate the risk of nonpayment and also provide funds to solve cash flow problems that can arise for exporters offering more flexible credit terms.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Outline the main types of export working capital financing provided by commercial banks

    Describe the role of export factoring as a financing tool in international trade

    Explain the concept of forfaiting and how it differs to factoring

    Understand the importance of export credit insurance in international trade finance

    Describe how export credit agencies (ECAs) can assist exporters who have difficulties obtaining financing through traditional commercial sources

  • COURSE OUTLINE

    Topic 1: Export Working Capital (EWC) Financing

    Types of EWC Financing

    o Revolving Credit Facilities

    o Short-Term Loans

    o Invoice Discounting

    Topic 2: Export Factoring

    Basic Concept

    Transaction Structure

    Recourse versus Non- Recourse

    Timing of Payment by the Factor

    o Collection factoring

    o Advance Factoring

    o Partial Payment Factoring

    o Pre-Shipment Factoring

    Factoring versus Other Export Finance Options

    o Factoring versus Bank Financing

    o Factoring versus Invoice Discounting

    o Factoring versus Export Credit Insurance

    Topic 3: Export Forfaiting

    Basic Concept

    Transaction Structure

    Cost

    Differences between Factoring & Forfaiting

    o Volume/ value

    o Credit Period

    o Recourse/ Non-Recourse

    o Risk

    Topic 4: Export Credit Insurance

    Basic Concept

    Risks Covered

    o Commercial

    o Political

    Providers

    o Private Commercial Insurance Companies

    o Export Credit Agencies (ECAs)

    Cost

    Typical Terms

    o Duration

    o Indemnity

    o Exclusions

    Benefits & Drawbacks

    Financer-Mandated Export Credit Insurance

    o Direct Insurance

    o Loss Payee Coverage

    Topic 5: Export Credit Agencies (ECAs)

    Role of ECAs

    Products

    o Direct Loans

    o Guarantees

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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