Export financing is a cash flow solution for exporters. It allows businesses that sell products or services to another country to get access to cash before their clients pay for the products ordered. This process is also called invoice factoring or simply invoice financing.

How does export finance work?

First, the client makes a purchase from the exporter. Then, the exporter bills the client allowing them to pay for the goods at a later date and ships the goods sold. This means that even though the exporter already made a sale and shipped the products, they might not receive a payment until the invoice is due, which in some cases can be 30, 60, or even 90 days.

To overcome this cash flow issue, the exporter decides to try export financing. It will sell the invoice to an invoice factoring company that will give them a substantial percentage of the total purchase made by the client and it will take over the responsibility of collecting the payment from client once the payment is due.

Once the client pays off the invoice, then invoice factoring company gives the exporter the rest of the money minus a fee.

Export financing with Velotrade

Velotrade provides invoice factoring services for a wide range of businesses, including exporters. Depending on the creditworthiness of the debtor and the length of the commercial relationship, we are able to provide them a substantial percentage of the amount due by the client from the day the purchase order is made.

You can use Velotrade’s factoring calculator to get an idea of how payments and fees work.

Also, Velotrade does not lock businesses into long-term contracts, which means they get to decide how many invoices they want to sell and how long they want to keep partnering with Velotrade. In fact, businesses don’t need to own any high value assets in order to attain funding! Velotrade offers flexibility that allows clients to fund only the invoices they want.

If you want to know more about our services, contact us and we’ll guide you through the process of export financing and invoice factoring.