Exporting can be a somewhat daunting endeavor, even though the foreign markets represent a great opportunity for tremendous growth. It can increase your sales and profits. It can offer you an expanded and diversified customer base. And it even offers some sort of stability to help you deal with the US economic situation. But you can only get these benefits if you know how to do it properly.
Nonetheless, more businesses in the US are taking the chance. In a 2010 small business survey, 52% of the respondents had sold goods or services outside the US. In 2013, it grew to 64%.
But it is not without its challenges. There are always some concerns, and for companies who export goods and services abroad here are a few of the more common problems which PO funding international lenders can help resolve:
- You’re not sure about getting paid. This is crucial, especially if you are relying on that payment to cover operational costs. While 69% of exporters ship their goods when they receive the full payment in advance, only 43% ship on a 30-day open account. Only 17% offer extended payment terms to customers overseas. Only 2% of exporters report that their banks would advance funds to them upon shipping the goods.
Accepting only advance payments can make sure you get the money you need to use as working capital, but this can severely limit the number of customers you get abroad. There aren’t that many overseas companies that can pay in advance, outside huge multinationals.
But with PO funding international, you can get the money right away. The funding company provides you with the working capital you need, so that you can cover the expenses involved in the deal. You get a percentage of the amount of the purchase order up front. This process is very quick, as it may only take two weeks or so.
- You’re not entirely sure what to do. Some people ask their embassy personnel for some guidance, but that doesn’t always work out well. But a PO funding international company will have the experience to guide you through the process. They’ll know all about the rules and regulations involved. They can offer you the advice you need to make sure that you do everything right, because after all this transaction involves their money too.
- You don’t want to carry more debt. More debt means your credit may be at risk. But this doesn’t apply to purchase order funding, because technically it’s not a loan at all. It’s not a loan, but rather a cash advance.
Selling abroad is really one way of making sure that your business growth is steady and assured. It can be a very confusing process, but with the purchase order funding you’ll get the cash flow you need to make it work.