International trade adds to or increases some risks compared to domestic trade; we ensure that you know the risks in order to eliminate or reduce them.
These are some of the additional risks you need to know of and to manage:
- Customer risk or commercial risk is not only the risk that the buyer is not financially able to pay as agreed but can also include his will to pay as agreed.
- Country risk or political risk includes for instance the risk of war, civil riots, acts of God and changes in trade regulations, etc.
- Foreign exchange risk arises when you invoice in a currency in which you do not have payments and consequently are forced to sell the incoming currency at the time of payment.
- Other risks could include the transportation of the goods and/or interest rate fluctuations.
Get the optimal benefit of your international trade transactions. Using collections (direct collections) or documentary credits for the payment opens a range of new possibilities for you and the buyer to arrange and handle the financing in an efficient and secure way.
The same applies if you offer your buyer a guarantee such as an advance payment guarantee. Financing of larger transactions or projects is normally handled as structured financing or as project financing. Using the flexibility of Collections, Documentary Credits and Guarantees, you will have a vast number of possible solutions to the financing needs of your international trade.
Payment and Cash Management
We find a solution that suits both your and the supplier's requirements. As a supplier you would probably prefer to receive the payment before you make the delivery while the buyer would probably ask for the goods before payment is made. By using the right payment method and structuring it the right way, you can always find a solution that meets the requirements of both parties.
These are the most common standard payment methods in international trade:
- Clean payment
- Collection (an alternative to regular collections)
- Documentary Credit
Combined with a guarantee, you have a large variety of options in order to achieve the solution needed for your international trade.