Any company looking to export products or services from the United States must take into consideration the relevance of Free Trade Agreements (FTAs). There are about 20 of these in place, through which favourable treatment makes business easier and cheaper to conduct. FTAs are usually bilateral and sometimes mean that more record keeping in trading situations is needed. They build on the World Trade Organisation (WTO) Agreement and do provide advantages when competing against products from other countries. These agreements are put in place to increase transparency in the trade and investment environment, ultimately resulting in greater stability.
While the US carries a large balance of trade deficit, reflecting the difference between the value of imports and exports, this figure has reduced recently as imports have decreased more rapidly than exports.
Exporting to The United States? Contact our local experts
Trade finance is a revolving facility which alternative financiers offer - it enables firms to purchase inventory and can help ease cashflow issues.
Typically, an alternative financier will fund all of the cost of the product, including charges (e.g. taxes).
If you're an SME importing or exporting stock supplies internationally, then a trade finance facility would allow you to fund this through offering a LC (letter of credit) or some form of cash advance.
If you are looking to export goods to other countries, you may require export finance, which is a commercial agreement between yourself (the exporter), and the importer from overseas. A alternative financier would advance you the cost of producing the stock supplies that you are exporting (as a debt instrument), either once you have sent the goods, or before manufacturing them. Once your foreign importer has received the inventory and pays you for the import, you will repay the advance loan from the funder over an agreed period.
Read the TFG Exporters Guide here.
Importing from The United States? Contact our local experts