This final installment in MSU’s three-part series ( part one, part two) on exporting to international markets delves into the importance of protecting your investment and knowing where to turn for assistance. It reviews financial solutions to obtain working capital, post bonds, and obtain credit insurance, along with a host of trade services offered by Export Development Canada and Global Affairs Canada’s Trade Commissioner Service.
Make sure this transaction won’t jeopardize your financial situation
- Do I have the cash to deliver on the order? Cash flow can be a bigger challenge for export orders than for domestic ones, both because the order may be larger and because it may take longer to get paid due to longer delivery times and extended payment terms. EDC’s financial solutions can help you get more working capital from your bank or post bonds and guarantees without tying up your working capital.
- What if my client doesn’t pay me? Ensuring you get paid is tougher when you have greater physical and cultural distance from your client. Plus, when you’re in different countries it is more complicated to verify if your client is credible and creditworthy, or to pursue them if they are late on their payment. The two steps you can take to minimize your risks are to use good credit management practices and get credit insurance so that you don’t suffer a huge loss in the event that your client doesn’t pay you.
Reach out to those who can help – that’s what they’re for!
- You’ve probably figured out by now that EDC can help with financial solutions for your export activities. If you want to know how EDC can boost your cash flow or mitigate your risks, call them at 1-800-229-0575. They can also help you better understand your export markets. Check out EDC’s Publicationspage for market guides and practical advice on everything from dealing with country risk to finding and managing foreign distributors.
- The Trade Commissioner Service, part of Global Affairs Canada, is an excellent resource to tap into for export advice and in-market connections. Check out the resources on their site by browsing their Country info pages. Make sure to contact your local trade commissioner for one-on-one advice.
Whether or not you’re planning to sell internationally in the near future, you never know when an export opportunity might come your way. We hope we’ve armed you with the tips and resources you need so that, when the opportunity comes, you know what you need to do to successfully complete your first export order.