Trade financing and understanding lender criteria.
How they rate you
Obviously, the lender will do comprehensive checks on your business and products. It is advisable to have a detailed export plan ready and be able to clearly show how and when a loan will be repaid. The typical information required may include some or all of the following*:
Year end financial statements for the last three years on the business and copies of signed tax returns
Current interim financials, normally not older than 90 days
Personal financial statements on all owners with 20% or more of the company's shares and copies of each of their last three years' individual tax returns
Product literature/business plan or narrative on how the business is operated, number of products produced and sold to indicate proof of ability to perform
Resumes on key management
Financial projections (P&L) and a cash flow statement
Proof that 50% of content in the product(s) originates in the country of export
Purchase order copies from foreign buyers
Information on foreign buyers and their ability to pay
What you can do
Likewise, you should hunt around for the best loan, as well as the institution which understands what you want to achieve through export.
Ask the following questions:
What are the charges for confirming export documentation (letters of credit, processing drafts, and collecting payments)?
Does the bank have foreign branches or affiliate banks? If so, where are they located?
Can the bank provide buyer credit reports? At what cost?
Does the bank have experience with your federal and state government financing programs that support small business export transactions? If not, is it willing to consider participating in these programs?
