Trade Finance Guide, A Quick Reference for U.S. Exporters has been written to help U.S. companies, especially small and medium-sized enterprises (SMEs), learn the fundamentals of trade finance to turn their export opportunities into actual sales and to achieve the ultimate goal: to get paid for their export sales. Eleven concise, two-page chapters offer the basics of numerous financing techniques, from open accounts, to forfeiting, to government assisted foreign buyer financing.

Welcome to the first edition of the Trade Finance Guide: A Quick Reference for U.S. Exporters. This guide is designed to help U.S. companies, especially small and medium-sized enterprises (SMEs), learn the basic fundamentals of trade finance to turn their export opportunities into actual sales and to achieve the ultimate goal:to get paid for their export sales, especially on time. This guide provides general information about common techniques of export financing. Accordingly, you are advised to assess each technique in light of your specific situation or needs.

The Trade Finance Guide will be revised and updated annually. Future editions may include new chapters discussing other trade finance techniques and related topics.

Benefits of Exporting

Key Players in the Creation of the Trade Finance Guide

The International Trade Administration (ITA) is an agency within the U.S. Department of Commerce whose mission is to foster economic growth and prosperity through global trade. ITA provides practical information to help you select your markets and products, ensures that you have access to international markets as required by our trade agreements, and safeguards you from unfair competition in the form of dumped and subsidized imports.

ITA is made up of the following four units: (1) The Commercial Service—the trade promotion unit that helps U.S. businesses at every stage of the exporting process; (2) Manufacturing and Services—the industry analysis unit that supports U.S. industry’s domestic and global competitiveness; (3) Market Access and Compliance—the country-specific policy unit that keeps world markets open to U.S. products and helps U.S. businesses benefit from our trade agreements with other countries; and (4) Import Administration—the trade law enforcement unit that ensures that U.S. businesses face a level playing field in the domestic marketplace.

Visit www.trade.gov for more information.

Download Trade Finance Guide: A Quick Reference for U.S. Exporters

PDF format, 712KB, 28Pages.

Table of Contents
Introduction ......................................................................................................1
Chapter 1: Methods of Payment in International Trade.................................3
Chapter 2: Cash-in-Advance.................................................................................5
Chapter 3: Letters of Credit..................................................................................7
Chapter 4: Documentary Collections................................................................9
Chapter 5: Open Account....................................................................................11
Chapter 6: Export Working Capital Financing................................................13
Chapter 7: Government-Guaranteed Export Working Capital Programs 15
Chapter 8: Export Credit Insurance..................................................................17
Chapter 9: Export Factoring...............................................................................19
Chapter 10: Forfaiting............................................................................................21
Chapter 11: Government Assisted Foreign Buyer Financing.........................23

Published April 2007
The International Trade Administration’s mission is to create prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring fair trade and compliance with trade laws and agreements. To learn more about the ITA write to: International Trade Administration, Office of Public Affairs, U.S. Department of Commerce, Washington, DC 20230, or visit the ITA’s Internet site.

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