If you distribute and trade overseas having the correct type of funding is vital, it can be the difference between success and failure. When trading overseas it can be extremely profitable and somewhat exciting. But when it comes to International Invoice Factoring most people always tend to think it’s a far more complicated product to implement into their business, in this factoring blog we are going to go into detail about how it works and how it isn’t that different from a normal factoring facility.
International Invoice Finance in a nutshell is the same as a normal invoice finance facility but it enables you to build a customer base overseas. Trading internationally is complicated enough without dealing with the potential language barrier and cultural differences, this will obviously delay communication and potentially payment terms as their standard terms could be far more than you expect. The last thing you want to worry about is getting paid for the goods or service and waiting up to 30-60-90 days on top of the 8 – 12 weeks shipping delivery for example.
With International Invoice Factoring up to 80-90% of the invoice, reaches your bank account straight away with the remaining balance being paid to you once your customer pays the invoice. Allowing you to distribute overseas successfully without worrying about the financial obligations. Most funders will only allow you to trade internationally up to a certain percentage of your overall turnover, normally around 50/60% and additional to capping your potential customer base they will also only advance around 40-50% of your invoice. Most funders don’t like dealing with International Invoice Finance customers.
As we are specialist factoring brokers we have specific funders who will look at your business as long as its UK registered. The funders will look at your customer base and they won’t cap your business to a certain percentage of international trade nore will they limit your advance.
With longer credit terms, further distance for goods to travel and other obstacles in the way of both importers and exporters, international trade can be much more complicated. A range of established international finance companies are available to help businesses overcome these challenges. Whether you are a UK-based importer or exporter, have overseas offices or are a multinational corporation, it is important to evaluate all the international finance options that are available to your business. If you need to chat about your options we are more than happy to help so please don’t hesitate to get in touch.