International Trade Finance
International Trade Finance
Answer 1
Negotiations on Documentary Collections and Factoring of Export Debts.
TTL has always followed straight documentary collection - documents against payment, however with credit being expensive in most global markets, TTL providing its overseas customers with alternative payment solutions would give its company a strong edge, in the competitive footwear business.
Documentary collection, credit pros with an intermediate level of risk, there are two types of documentary collections * Documents against acceptance * Documents against collection
On the other hand, Export Factoring is an another option for TTL when, TTL receives an order from overseas and is unsure about its client's reliability or is experiencing pressure on its cash flow, it may contract a factor. As the bank has greater financial and research resources, it will be able to check the client's local credit rating and, if this checks out, pay the amount owed immediately excluding a payment made to the exporter. When the order is received, TTL could then pay the bank back directly
There are certain features of Documentary collection that could have a positive impact on TTL’s business , such as
- Payment is typically faster than with an open account.
- TTL can retain control of the goods until payment under documents against payment — or gain a potentially negotiable financial instrument in the form of a document pledging payment within a certain time period under documents of acceptance.
- Documents against acceptance terms are more secure and enforceable than open account terms, while documents against payment terms still provide the seller with considerably less risk than open account.
Export Factoring mainly has There are two main advantages that could play a positive role in TTL’s business .First, it receives the money for the order immediately, meaning that its cash flow does not depend upon waiting for the goods to be
Answer 1
Negotiations on Documentary Collections and Factoring of Export Debts.
TTL has always followed straight documentary collection - documents against payment, however with credit being expensive in most global markets, TTL providing its overseas customers with alternative payment solutions would give its company a strong edge, in the competitive footwear business.
Documentary collection, credit pros with an intermediate level of risk, there are two types of documentary collections * Documents against acceptance * Documents against collection
On the other hand, Export Factoring is an another option for TTL when, TTL receives an order from overseas and is unsure about its client's reliability or is experiencing pressure on its cash flow, it may contract a factor. As the bank has greater financial and research resources, it will be able to check the client's local credit rating and, if this checks out, pay the amount owed immediately excluding a payment made to the exporter. When the order is received, TTL could then pay the bank back directly
There are certain features of Documentary collection that could have a positive impact on TTL’s business , such as
- Payment is typically faster than with an open account.
- TTL can retain control of the goods until payment under documents against payment — or gain a potentially negotiable financial instrument in the form of a document pledging payment within a certain time period under documents of acceptance.
- Documents against acceptance terms are more secure and enforceable than open account terms, while documents against payment terms still provide the seller with considerably less risk than open account.
Export Factoring mainly has There are two main advantages that could play a positive role in TTL’s business .First, it receives the money for the order immediately, meaning that its cash flow does not depend upon waiting for the goods to be