With reference to Allyson Stewart-Allen’s article (Entrepreneur’s Notebook, Dec. 1), many small U.S. companies following the “paths to business growth abroad” fail to penetrate overseas markets because they have not learned how to extend competitive credit terms to their foreign customers.
Cash in advance and letters of credit are no longer competitive terms in the international marketplace. When export business requires U.S. companies to extend credit overseas, they can protect their foreign receivables and be confident of getting paid with an export credit insurance policy.
Used extensively by companies in other countries, export credit insurance is relatively unknown among U.S. small businesses, although it has begun to catch on here in the last few years.
Export credit insurance is an effective marketing and financing tool that helps exporters close more sales, increase order quantities, negotiate larger contracts and open new markets. Credit insurance can also enhance an exporter’s borrowing capacity by making it possible to include foreign receivables in their collateral base.
A wide selection of export credit insurance plans are available from government and private-sector sources. Policies can be structured to meet the requirements of both experienced exporters and companies new to international sales.
Meridian Finance Group