Many small to mid-sized business owners in the USA see an international trade invoice as just a piece of paper, at least until the international buyer makes good on the terms.
In reality, that simple piece of paper represents a possibility to grow your business, to enter into new markets and even complete marketing research and development of new product lines.
The Power in the Paper
With an international trade invoice, a company in the United States has demonstrated the ability to sell internationally. However, the big drawback is the terms of payment, which are often extended past the typical 30 to 60 day domestic time range to 90 to 120 days or more for international business to business sales.
This potentially leaves a company in the USA without the capital from the sale for up to four months, or sometimes longer, which can have a serious impact on the ability to take opportunities as they arise.
The Power of Factoring
By using an international factoring company, that international trade invoice can result in funding of up to 95% of the total dollar value of the transaction.
This is not a loan, but rather an advance on the payment coming from the buyer. The factor will charge a pre-determined fee for the service and, in addition to providing the advance, they will also complete the account management for the accounts receivable.
By using international factoring, your business will be able to immediately use the money advanced to buy necessary materials for production as well as move into new markets. There are no limitations on what the funds can be used for, which includes the ability to create new product lines based on international or domestic customer feedback and demand.