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The Growth Lending guide to export finance

Find out what export finance is, how it works and how it can benefit your business

Maddie Dumpleton

Long payment terms can often create challenges with a company’s working capital, particularly when they export products or services. The upfront costs associated with producing and shipping goods can be a difficult thing for a business to navigate. 

Export finance can help with this, releasing working capital that would otherwise be tied up in invoices or purchase orders. 


Find out what export finance is and how it can support your business

What is export finance?

Export finance is a cash flow solution for exporters, which helps to facilitate the commerce of goods internationally by enabling them to overcome long payment terms from their customers. 

There are different lending options that can be used and the set-up of a company will typically determine which is the best and most viable option for a business owner to choose.

 

Types of export finance

Pre-shipment finance: provided when exporters need funds before the shipment of products or goods.

Post shipment finance: provided after the shipment of products or goods.

Finance against collection of bills: in the case of international export, exporters can obtain a loan from the bank against those bills sent for collection.

Finance, gains, allowances and subsidies: government provides subsidies to the exporters to enable them to sell the goods at a reduced price to importers.

Discounting letter of credit: consists of security from the issuing bank regarding making payment.

 

How does Growth Lending’s export finance work?

After your export business has set up payment terms with an overseas customer, which is typically between 90 to 120 days, it might struggle with its cash flow because of the delay between shipping goods and receiving payment. 

Issuing your unpaid invoices to an invoice finance provider like Growth Lending, will allow you to bridge the working capital gap that late payments create. 

Our export finance is simple: 

  1. Send an invoice to your debtor in Euros, US dollars or sterling
  2. Upload this invoice to Growth Lending’s client portal
  3. Swiftly receive up to 85% of the invoice value
  4. The debtor will pay the invoice when it’s due into a Growth Lending trust account
  5. You then receive the remaining percentage balance minus fees

 

 

Benefits of this type of export finance

  • It’s accessible to more businesses, as opposed to a bank loan that requires more trade documentation and greater security to access funds 
  • Only pay for the finance you need by choosing which invoices you want to fund to keep costs low 
  • It enables you to access working capital more quickly, which can be used to:
    • Smooth out cash flow
    • Supply more businesses and pursue bigger growth opportunities 
    • Minimise risk of non-payment if bad debt protection is included
    • Purchase more stock at a faster rate and store it to plan for contingencies
    • Reinvest in headcount and grow teams
    • Fund potential acquisitions, MBOs and MBIs

 

Why choose Growth Lending to fund your export finance? 

We can fund invoices in Euros, US Dollars and sterling for businesses based in the UK, US and Germany, as well as other OECD countries on request. This means you don’t need to find multiple lenders across different jurisdictions to support your cross-border sales for a more streamlined funding process.

Growth Lending also does not need to fund the UK element of your invoice finance requirements. If you already have a lender in place to support your UK business, but need further support for invoice finance in Euro or US dollars, we can operate these as standalone facilities.

 Our facilities are charged at the competitive rate of 0.75% typical on the invoices financed and once onboarded we can fund invoices within 48 hours, so you can access cash quickly without high fees.

We’re also flexible around invoice limits, funding invoices from $10k to $5m in Euros and US dollars and have a high single debtor limit of $2.5m.

Lastly, our expert team can guide you through the process from start to finish and structure your facility to suit the needs of your growing business – if these needs change, your facility can too.