Purchase Solution

Export-Import Bank on International Trade

Not what you're looking for?

Ask Custom Question

Financing Foreign Trade

For foreign trade to occur, there needs to be a buyer to buy the goods and a seller to sell the goods. There are various ways to finance foreign trade including discounting, bankers' acceptances, forfaiting, and factoring. With discounting, a financial institution takes exporters' drafts and converts them to cash less the discounted interest and fees. A banker's acceptance is a promised upcoming payment that's guaranteed by a bank. Forfaiting involves the purchase of receivables from exporters by a forfaiter. The forfaiter earns a fee for taking on all the risks that come with the receivables. With factoring, a company sells accounts receivable at a discount to another company which is known as the factor. The factor assumes all the payment risk.

References:

Klapper, L.F. (2005, June 24). The role of factoring for financing small and medium enterprises. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=748344.

Mann, R.J. (2000, March 31). The role of letters of credit in payment transactions. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=214633.

How can the Export-Import Bank help to facilitate international trade?

Purchase this Solution
Solution Summary

How can the Export-Import Bank help to facilitate international trade is determined. The factors that assume all the payment risks are given.

Solution Preview

There are several ways that the Export-Import Bank can help facilitate international trade and this include the following:
1. As mentioned, foreign trade parties need access to special financing such as accounts receivable ...

Purchase this Solution
Free BrainMass Quizzes
Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

View More Free Quizzes
Related BrainMass Solutions

  • Exim bank and International trade administration

    156218 How can the International Trade Administration (ITA) and the Export-Import Bank (Ex-Im Bank) assist you in developing a global marketing plan? 1.

  • Export Import Federal and State Agencies

    Federal Agencies: Export-Import Bank of the United States: http://www.exim.gov Export-Import Bank of the United States 811 Vermont Avenue, N.W.

  • international monetary system with exchange rates, interest

    "Current account surplus" is Net Export reflected on the Balance of International Payments, which means if the Export overpasses Import, the transaction would contribute to US current account surplus.

  • International trade, procedures and documentation encountered

    International Trade: International trade is the exchange of goods and services among countries globally.

  • Chinese International Trade

    Due to these factors, China is very open to international trade, in respect to that export of its products around the world, but is more restrictive in international trade when it comes to the import of foreign products.

  • choices MNEs have for handling international trade payments

    Another popular method is letter of credit or LC, wherein the issuing bank or bank of the importer issues a written undertaking on behalf of the import to pay the exporter the entire payment within a prescribed timeframe and against receipt of stipulated

  • Roles Played by WTO, IMF and World Bank in the World Economy

    For example: Changes in the export-import tariffs often become the reason of hostility in the organizations. It has a great impact on organizations as well as country economic growth.

  • Business: Export Assistance, Purpose of Counter-trade

    Answer 2 Counter-trade Counter-trade is contractual arrangement that links two countries on the basis of export and import with the limited use or no use of currency (Tuller, 2008).

  • World Trade

    The world trade or international trade operations between different countries are carried out as per the export-import or international trade policies of individual nations and are also regulated by the prevailing trade agreements, treaties, trading blocs

View More Related Solutions