00486084

Component

https://onlinepubs.trb.or...trcircular/332/332-002.pdf

There are a number of ways available for businesses to finance export transactions. This paper addresses businesses with annual sales of $100,000 or less and separates the topic into pre-export and post-export financing. To finance a pre-export transaction (a transaction taking place from receiving an order to delivery for shipment), the resources can be internal or external. Internal resources are generated from the day to day activities of the business as cash flow. External resources come from borrowing. In post-export financing, the situation exists where the exporter was able to purchase the goods or services and shipment was made to its overseas destination. Two types of risk are involved: commercial risk and political risk. To get paid in the international market, four alternatives are available: cash payment, open account transactions, documentary collections, and letters of credit transaction. In most cases, a commercial letter of credit is the only way a U.S. exporter is willing to sell his products overseas.

This paper appears in Transportation Research Circular No. 332, Ports, Waterways, Intermodal Terminals, and International Trade Transportation Issues: Proceedings of the 12th Annual Summer Conference, July 7-10, 1987, Norfolk, Virginia. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved.

p. 4-5

1988-4

Transportation Research Circular

Digital/other

Cash flow; Exports; Financing; Hazards; International trade; Payment; Risk assessment

Letters of credit

Finance; Highways; Marine Transportation; Safety and Human Factors

TRIS, TRB

Aug 31 1989 12:00AM

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