How to Set Up Trade Finance for Export Businesses in the USA: A Comprehensive Guide
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How to Set Up Trade Finance for Export Businesses in the USA: A Comprehensive Guide
Alright, let's talk brass tacks about something that can feel like a labyrinth but is, in reality, your absolute best friend in the world of international trade: trade finance. If you're a US exporter, whether you're shipping widgets from Wichita or software from Silicon Valley, understanding and leveraging trade finance isn't just a good idea; it's a non-negotiable part of staying competitive, managing risk, and, frankly, sleeping soundly at night. I’ve seen countless businesses, big and small, stumble or soar based on how well they grasp these concepts. So, pull up a chair, grab a coffee, and let's dive deep into making trade finance work for you.
Understanding Trade Finance: The Exporter's Lifeline
When I first started in this game, trade finance felt like this mystical beast, whispered about in hushed tones by seasoned veterans. But it’s not magic; it’s a robust, incredibly vital set of tools designed to smooth out the inherent bumps and risks of selling across borders. Think about it: you’re dealing with different legal systems, varying currencies, enormous distances, and buyers you might never meet face-to-face. That's a lot of variables, right? Trade finance steps in to bridge those gaps, offering a safety net and a springboard all at once. It’s not just about getting paid; it’s about getting paid securely, on time, and having the capital to fulfill the order in the first place.
What is Trade Finance?
At its heart, trade finance is a comprehensive suite of financial instruments and services meticulously crafted to facilitate international trade. For us US exporters, this means everything from ensuring your overseas buyer actually pays you, to getting the cash you need to manufacture those goods before they even leave your factory floor. It’s a mechanism that mitigates the inherent risks associated with cross-border transactions – risks like non-payment, currency fluctuations, political instability in the buyer's country, or even just plain old delays in shipping. Without it, the global economy as we know it would grind to a halt. Imagine a world where every single international transaction was based purely on trust between two parties who are thousands of miles apart and operate under different legal frameworks. It would be chaotic, inefficient, and frankly, terrifying for anyone trying to expand their business beyond their domestic borders.
So, when we talk about trade finance, we're not just discussing a single product; we're referring to a broad spectrum of solutions. These can range from complex documentary credits that guarantee payment, to simpler insurance policies that protect against buyer default, or even short-term loans that inject crucial working capital into your operations. The beauty of it lies in its adaptability: there’s usually a solution tailored to almost every conceivable scenario an exporter might face. It’s about optimizing your cash flow, yes, but more profoundly, it’s about de-risking the entire export journey, making the improbable possible, and the intimidating accessible. It empowers you to confidently step onto the global stage, knowing that the financial architecture is there to support your ambitions.
Why is Trade Finance Crucial for US Exporters?
Look, let’s be brutally honest: exporting is tough. It's rewarding, incredibly so, but it's tough. You're competing globally, often against companies that have been exporting for generations. Without robust trade finance, a US exporter is essentially fighting with one hand tied behind their back. The most immediate and tangible benefit is undoubtedly cash flow management. Picture this: you land a massive order from a new client in Europe. Fantastic! But that order requires significant upfront investment in raw materials, labor, and manufacturing. Then, there's the shipping time, customs clearance, and finally, the payment terms with your buyer, which might be 60 or even 90 days after they receive the goods. That’s a long time for your capital to be tied up. Trade finance bridges that gap, providing you with the liquidity to fulfill the order without straining your domestic operations or missing out on other opportunities.
Beyond cash flow, the mitigation of payment and performance risks is paramount. I remember a small textile exporter in North Carolina who, early in his career, shipped a large consignment to a buyer in a developing country on open account terms – pure trust. The buyer reneged, citing "quality issues" that were entirely fabricated. The exporter lost the entire shipment and nearly went under. That's a brutal lesson, one that trade finance instruments like Letters of Credit or export credit insurance are specifically designed to prevent. They shift the risk away from you, the exporter, and onto a bank or an insurer, providing an invaluable layer of security. This risk reduction, in turn, enables access to new, often higher-growth, markets that might otherwise be deemed too risky. Imagine being able to confidently pursue opportunities in regions with less stable economies or less predictable legal systems, knowing your payment is secured.
Finally, and this is a big one, trade finance provides a critical competitive advantage. In today's global marketplace, buyers often have options. If you can offer more attractive payment terms – say, extending credit to a buyer because your payment is insured, or because you can get early payment through factoring – you immediately stand out. While your competitor demands cash in advance, you can offer 30 or 60 days to pay, making your offer far more appealing. This isn't just about winning a single deal; it's about building long-term relationships and establishing your reputation as a flexible, reliable, and secure partner. It's about empowering your sales team to go out there and truly compete, knowing that the financial backbone is solid.
Key Players in US Export Trade Finance
Navigating the landscape of trade finance in the US can feel a bit like being at a bustling marketplace, with different vendors offering their wares. But once you understand who the major players are, it becomes much clearer. Each entity brings a unique set of capabilities, risk appetites, and program structures to the table, and understanding their roles is critical to finding the right fit for your export needs. It's not a one-size-fits-all world, and intelligently combining offerings from different players can often yield the most effective solution.
First up, and probably the most familiar, are the commercial banks. These are your traditional financial institutions, from the behemoths like JPMorgan Chase and Bank of America to regional and community banks. They offer a wide array of trade finance products, including Letters of Credit, documentary collections, working capital loans, and even some forms of export credit insurance, often in partnership with other entities. Their strength lies in their extensive networks, their familiarity with international banking practices, and their ability to integrate trade finance with other banking services you might already use. However, their risk appetite can vary significantly, especially for smaller businesses or those exporting to higher-risk markets.
Then we have the heavy hitters from the government agencies, designed specifically to support and stimulate US exports. The Export-Import Bank of the United States (EXIM Bank) is the official export credit agency of the US. Their mission is to support American jobs by facilitating the export of US goods and services. EXIM offers crucial programs like working capital guarantees, direct loans, and export credit insurance, primarily for situations where private sector financing isn't readily available or sufficient. They're often the go-to for exporters looking to mitigate political and commercial risks in challenging markets or for larger, more complex deals. Alongside EXIM, the Small Business Administration (SBA) plays a vital role, particularly for smaller and medium-sized enterprises (SMEs). The SBA has specific export loan programs designed to help smaller businesses access the capital needed to fulfill export orders or to expand their export capabilities, often by guaranteeing a portion of loans made by commercial banks.
Beyond these traditional players, there's a vibrant ecosystem of private financiers and credit insurers. Private financiers, often non-bank lenders or specialized trade finance companies, have emerged to fill gaps in the market, providing more flexible or niche solutions, particularly for smaller transactions or industries that banks might shy away from. They often specialize in things like factoring or purchase order financing, offering speed and flexibility at a potentially higher cost. Credit insurers, like Euler Hermes or Coface, provide policies that protect exporters against the risk of non-payment by foreign buyers due to commercial (e.g., bankruptcy) or political reasons. They can be standalone solutions or complement bank financing by making a bank more comfortable lending against insured receivables. Understanding this diverse cast of characters means you can strategically piece together the best financial strategy for your unique export journey.
Pro-Tip: Don't Put All Your Eggs in One Basket
Many successful exporters diversify their trade finance relationships. They might use their primary bank for Letters of Credit, EXIM for credit insurance on riskier markets, and a specialized private financier for quick working capital on specific orders. This multi-pronged approach builds resilience and ensures you always have options.
Navigating the Landscape of Trade Finance Options for US Exporters
Alright, now that we've got the lay of the land and know who's who, let's get into the nitty-gritty of the actual financial instruments. This is where it gets really interesting because you've got a whole toolbox at your disposal, and knowing which tool to pick for which job is the mark of a savvy exporter. We'll break these down into categories, moving from funding your production all the way to securing your payments, ensuring you understand the flow of finance through your export journey.
Pre-Shipment Finance: Funding Production & Sourcing
Imagine you've just landed that dream export order. You're ecstatic! But then reality hits: you need to buy raw materials, pay your staff for extra shifts, maybe even invest in some new tooling. All of this happens before you've shipped a single item, let alone received payment. This is precisely where pre-shipment finance steps in, acting as the crucial bridge between securing an order and actually getting it out the door. It's about ensuring you have the working capital to fulfill your commitments, preventing you from missing out on lucrative opportunities just because your cash flow is temporarily stretched. Many businesses, especially SMEs, find this stage particularly challenging, as traditional lenders might be hesitant to extend credit without tangible collateral or a track record of large export deals.
One of the most common forms here is a working capital loan. These are essentially short-term loans designed to cover your operational costs for a specific export order. A bank might extend a line of credit or a term loan that you draw upon to purchase inventory, pay for manufacturing overhead, or cover administrative costs associated with preparing the shipment. The key is that these funds are specifically earmarked to facilitate the production and preparation of goods prior to their departure. Sometimes, these loans can be secured by the export contract itself or by the promise of future receivables, especially if those receivables are backed by a Letter of Credit or export credit insurance. This makes banks more comfortable in lending, as their risk is reduced by the underlying security of the export transaction.
Then there’s purchase order financing, a lifesaver for many. This is particularly useful if you’re a reseller or a distributor who receives a confirmed purchase order from an overseas buyer but lacks the capital to buy the goods from your supplier. A purchase order finance company will essentially fund your supplier directly, or provide you with the funds to pay your supplier, allowing you to fulfill the order. They take a security interest in the goods and often get paid directly by your buyer (or through a Letter of Credit) once the goods are delivered. It’s a fantastic solution for businesses with strong sales but limited inventory or production capabilities. It's less about your balance sheet and more about the strength of the purchase order itself.
Finally, we have pre-export financing, which is a broader term encompassing various ways to fund the production phase. This might include advances against a confirmed export order, often structured with specific milestones. For instance, you might receive a portion of the funds when raw materials are purchased, another portion when manufacturing begins, and the remainder upon completion of the goods, but still pre-shipment. These solutions are often tailored to the specific production cycle of the goods being exported. The goal, regardless of the specific instrument, is always the same: to inject the necessary liquidity into your business at the critical juncture before the goods leave your hands, ensuring that a great sales opportunity doesn't become a financial bottleneck. It’s about proactive financial management, allowing you to say "yes" to those big orders with confidence.
Post-Shipment Finance: Securing Payments & Cash Flow
Okay, so you’ve successfully produced and shipped your goods. The container is on its way across the ocean, or the plane has taken off. Great! But now you’re back to that cash flow gap. You’ve expended resources, and you’re waiting for your buyer to pay, which could be weeks or months away. This is where post-shipment finance becomes your best friend, helping you turn those outstanding invoices into immediate cash. It's about accelerating your cash flow, reducing your reliance on your buyer's payment cycle, and freeing up capital that would otherwise be tied up in receivables. This is particularly vital for businesses with tight margins or those looking to reinvest quickly in new orders.
Accounts receivable financing is a broad category here. Essentially, you use your outstanding invoices (your accounts receivable) as collateral to obtain a loan. A bank or financial institution will lend you a percentage of the invoice value – typically 70-90% – upfront. Once your buyer pays the invoice, the financier collects the full amount, deducts their fees and the loan principal, and remits the remaining balance to you. This is a common and flexible way to get quick access to cash based on your sales. It’s less about your overall creditworthiness and more about the quality and payment history of your buyers.
Then we have factoring, which is a step beyond simple accounts receivable financing. In factoring, you actually sell your accounts receivable to a third-party financial institution (the "factor") at a discount. The factor then takes on the responsibility for collecting the payment from your buyer. There are two main types:
- Recourse Factoring: This is more common. If your buyer defaults on payment, you, the exporter, are ultimately still responsible for buying back the unpaid invoice from the factor. The factor essentially manages the collection process, but the credit risk remains with you.
- Non-Recourse Factoring: This is the holy grail for many. With non-recourse factoring, the factor assumes the credit risk of your buyer. If the buyer doesn't pay (due to insolvency, for example), the factor bears the loss. This provides a much stronger layer of protection for you, but it usually comes at a higher cost or is harder to obtain, as the factor is taking on significant risk. Non-recourse factoring is often combined with export credit insurance to make it more palatable for the factor.
Finally, there’s forfaiting, which is typically used for larger, longer-term export deals, often involving capital goods. In forfaiting, you sell your medium- to long-term receivables (usually evidenced by promissory notes or bills of exchange, often guaranteed by the buyer's bank) to a forfaiter (a specialized financial institution) without recourse. This means the forfaiter takes on all the commercial and political risk, and you, the exporter, are completely off the hook once the sale is made. It’s a clean break, giving you immediate cash and removing all future risk related to that specific transaction. While often more complex and for larger transactions, it offers unparalleled peace of mind for those big, multi-year projects.
Insider Note: The Power of Non-Recourse
For smaller businesses especially, non-recourse factoring can be a game-changer. It not only accelerates cash flow but also completely removes the credit risk from your balance sheet, allowing you to focus on sales and production rather than worrying about whether an overseas buyer will pay. It's a strategic move for growth.
Payment & Risk Mitigation Instruments
Now we're moving into the realm of how you actually get paid, and more importantly, how you protect yourself from the myriad of things that can go wrong. This is where the rubber meets the road in international trade, because simply shipping goods and hoping for the best is a recipe for disaster. These instruments are about managing the delicate balance of trust and risk between an exporter and an importer who might be on opposite sides of the world.
Let's start with the undisputed king of secure international payments: Letters of Credit (LCs). An LC is a commitment by a bank (the issuing bank, usually the buyer's bank) to pay you, the exporter, a specified amount of money, provided you present documents that comply with the terms and conditions of the LC. It's essentially a bank's promise to pay, substituting the buyer's credit risk with the bank's credit risk. This is incredibly powerful.
- Key Benefit: It offers the highest level of security for the exporter, as payment is guaranteed by a bank, not just the buyer.
- Risk Profile: Low risk for the exporter, higher risk for the buyer (who is committing their bank to pay regardless of goods satisfaction, so long as documents are compliant).
- Variations: Confirmed LCs (where a second bank, usually in the exporter's country, adds its guarantee), sight LCs (payment upon presentation of documents), and usance LCs (payment at a future date after document presentation).
Next up, we have Standby LCs (SBLCs). These are a bit different. Unlike a commercial LC, which is intended to be drawn upon, an SBLC is a secondary payment mechanism, a safety net. It's a bank's guarantee that if the buyer fails to fulfill their contractual obligations (e.g., payment), the exporter can present documents to the bank and get paid. It acts more like a guarantee or insurance policy.
- Key Benefit: Provides a strong assurance of payment in case of buyer default, without tying up capital like a commercial LC.
- Risk Profile: Moderate risk for the exporter, as it's a backup, not the primary payment method.
Then there are Documentary Collections. These are less secure than LCs but more secure than open account. Here, your bank (the remitting bank) sends your shipping documents to the buyer's bank (the collecting bank) with instructions for payment. The buyer can only get the documents (and thus release the goods from customs) once certain conditions are met.
Documents Against Payment (D/P): The buyer must pay before* receiving the documents. This offers a good level of security for the exporter.
Documents Against Acceptance (D/A): The buyer "accepts" a bill of exchange (promising to pay at a future date) before* receiving the documents. This is riskier for the exporter, as payment is not immediate and depends on the buyer's future willingness and ability to pay.
- Risk Profile: Moderate risk for D/P, higher risk for D/A compared to LCs, as there's no bank guarantee of payment.
Finally, we arrive at the most common, yet riskiest, method for the exporter: Open Account with Credit Insurance. In an open account transaction, you ship the goods and documents directly to the buyer, and they pay you at a pre-agreed future date (e.g., 30, 60, or 90 days after receipt). This is the least secure for the exporter but most attractive for the buyer, as they get the goods before paying. To mitigate this high risk, especially for new buyers or volatile markets, Export Credit Insurance becomes indispensable. This insurance protects you against non-payment by your foreign buyer due to commercial (e.g., bankruptcy, default) or political (e.g., war, currency restrictions) risks.
- Key Benefit: Allows you to offer competitive open account terms, which buyers love, while still protecting your receivables. It also makes your receivables more attractive to banks for financing.
- Risk Profile: High risk for the exporter if uninsured, significantly reduced to low/moderate risk when combined with robust credit insurance.
Pro-Tip: Negotiation is Key!
Always try to negotiate the most secure payment terms possible with your buyer. While buyers prefer open account, demonstrating the benefits of an LC (security for both parties, access to finance) or offering credit insurance as a compromise can often lead to a mutually beneficial agreement. Don't just accept the first offer.
Government-Backed Export Finance Programs (USA Specific)
This is where the US government steps up to the plate to bolster American exporters. These programs are specifically designed to fill gaps in the private market, take on risks that commercial banks might shy away from, and ultimately, make it easier for US businesses to compete globally. Knowing these resources inside and out can be the difference between a stalled export initiative and a thriving international business.
The Export-Import Bank of the United States (EXIM Bank) is the official export credit agency of the US, and it's an absolute powerhouse for exporters. EXIM's mission is clear: support American jobs by facilitating US exports. They do this by providing financing and insurance solutions that help US companies sell their goods and services internationally when private sector lenders are unable or unwilling to provide financing. Their programs are incredibly diverse and target various stages of the export cycle.
- Working Capital Guarantee Program: This is a lifesaver for many. EXIM provides guarantees to commercial lenders (your bank) that make working capital loans to US exporters. This guarantee covers 90% of the loan principal and interest, making it much less risky for banks to lend to you for export-related activities. This means you can get the funds needed to buy raw materials, manufacture goods, and even market your products before you ship. The eligibility is broad, covering both small and large businesses, and it's particularly useful for those who might not have sufficient collateral for a traditional bank loan. It essentially unlocks your bank's willingness to finance your export orders.
- Export Credit Insurance: This is EXIM's flagship product for risk mitigation. As we discussed, offering open account terms can be a huge competitive advantage, but it's risky. EXIM's export credit insurance protects US exporters against the risk of non-payment by foreign buyers due to commercial (e.g., buyer bankruptcy, protracted default) or political (e.g., war, expropriation, currency inconvertibility) risks. It covers up to 95% of the invoice value. Not only does this give you peace of mind, but it also makes your foreign receivables an attractive asset for banks, allowing you to get financing against them more easily. It's available for single buyers, multiple buyers, and even for whole portfolios of receivables.
- Direct Loans: While less common for small businesses, EXIM also offers direct loans to foreign buyers to purchase US goods and services. This is typically for larger projects or capital goods where the foreign buyer needs long-term financing that their local banks might not provide. For US exporters, it means their foreign buyer can secure the necessary financing to complete the purchase, thereby enabling the export sale.
Small Business Administration (SBA) Export Loan Programs
The Small Business Administration (SBA) is another critical government entity, but it focuses specifically on empowering smaller US businesses. While EXIM serves a broader spectrum, SBA's export programs are tailor-made for the unique challenges faced by small and medium-sized enterprises (SMEs) venturing into or expanding in international markets. These programs are designed to provide access to capital that might otherwise be unavailable from conventional lenders, recognizing that smaller businesses often lack the extensive collateral or credit history of larger firms.
- SBA Export Express: Think of this as the fast lane for smaller export loans. It's designed for quick access to funds up to $500,000. It's ideal for small businesses that need financing for various export-related activities, such as participating in trade shows, developing marketing materials for overseas markets, translating documents, or even securing a standby letter of credit. The application process is streamlined, and the SBA guarantees up to 90% of the loan, making it highly attractive to lenders. This program is particularly useful for those initial steps into exporting or for smaller, recurring needs.
- Export Working Capital Program (EWCP): This program is a direct counterpart to EXIM's working capital guarantee, but specifically for small businesses. The SBA guarantees up to 90% of a loan (up to $5 million) from a commercial lender, specifically for export working capital. This means you can get the funds needed to finance your export inventory, purchase raw materials, pay for labor, or cover other pre-shipment expenses. It’s designed to ensure that a lack of working capital doesn't prevent a small business from fulfilling an export order. The EWCP can be used for single export transactions or for a revolving line of credit.
- International Trade Loan (ITL): This is for longer-term needs. The ITL program provides loans up to $5 million (with an SBA guarantee of up to 90%) for small businesses that are either preparing to export, already exporting, or have been adversely affected by imports. Funds can be used for fixed assets (like equipment or facilities to expand export capacity) or for working capital. This program is a strategic tool for small businesses looking to make significant investments to become more competitive in the international marketplace or to recover from import competition. It's about building long-term export capability.
Numbered List: Key Benefits of Government-Backed Programs
- Risk Mitigation: They absorb significant commercial and political risks, making banks more willing to lend and exporters more confident to sell.
- Access to Capital: They provide guarantees or direct financing, unlocking capital for export activities that might otherwise be deemed too risky by the private sector.
- Competitive Edge: By enabling attractive payment terms (e.g., open account with insurance), they help US exporters win deals against international competitors.
- Market Access: They facilitate entry into challenging or emerging markets that private lenders might avoid due to perceived instability.
- Focus on Growth: They allow businesses to focus on production and sales, rather than constant worry about payment or financing constraints.
Private Sector Trade Finance Solutions
While government agencies provide invaluable support, the private sector is a dynamic and increasingly innovative space for trade finance. Commercial banks, of course, are a cornerstone, but a whole ecosystem of non-bank lenders and specialized trade finance companies has emerged, offering solutions that can be more flexible, faster, or simply more tailored to specific niches than traditional banking products. This is where you might find solutions for unique situations or when your traditional bank isn't quite meeting your needs.
Commercial banks, as mentioned, are your primary port of call. They offer the full spectrum of traditional trade finance products: Letters of Credit (issuing, advising, confirming), documentary collections, working capital loans (often with EXIM or SBA guarantees), and foreign exchange services. Their strength lies in their global reach, their integration of services (checking, treasury, lending), and their often lower cost for established relationships. However, banks are typically risk-averse, adhere to strict regulatory guidelines, and may have higher collateral requirements or be less flexible for smaller, non-traditional, or higher-risk transactions. Their underwriting processes can also be slower, which isn't always ideal in fast-paced international trade.
Stepping in to fill these gaps are non-bank lenders and specialized trade finance companies. These players operate with different business models and risk appetites, often focusing on speed, flexibility, and a more tailored approach.
- Factoring Companies: As discussed, they purchase your accounts receivable, offering immediate cash. Many specialize in export factoring, taking on the complexities of cross-border collections and currency conversions. They can be particularly attractive for smaller businesses that might not qualify for traditional bank loans or LCs.
- Purchase Order (PO) Finance Companies: These firms provide capital to fulfill specific purchase orders, often for businesses that don't manufacture but rather procure goods from suppliers and then resell them. They focus on the strength of the PO and the buyer, rather than the exporter's balance sheet. This is a niche but incredibly valuable service.
- Supply Chain Finance Providers: These can be banks or specialized fintech firms that offer programs to optimize working capital across an entire supply chain (more on this below). They might offer early payment to suppliers (like you, the exporter) at a discount, or extend payment terms to buyers, all facilitated by a third party.
- Peer-to-Peer (P2P) Lending Platforms: An emerging area, these platforms connect businesses needing financing directly with investors. While still relatively new in the trade finance space, they offer another avenue for alternative capital, often with a focus on speed and transparency, though due diligence is paramount for both sides.
The key differentiator for these private sector solutions is often their agility and willingness to work with a broader range of credit profiles and transaction types. They might charge higher fees or interest rates than a traditional bank, but the trade-off is often speed, less stringent collateral requirements, or access to financing for deals banks would decline. For a US exporter, exploring these options means expanding your toolkit and having more avenues to secure the necessary funding and risk mitigation for your global ambitions. It’s about being resourceful and understanding that not all finance comes from the same source.
Supply Chain Finance (SCF) for Exporters
Supply Chain Finance (SCF) is a relatively modern and increasingly sophisticated approach to optimizing working capital across an entire supply chain. While it benefits both buyers and sellers, for us, the US exporter, it can be a game-changer in how quickly and efficiently you get paid, especially when dealing with large, established buyers. It’s not just about a single transaction; it’s about creating a more fluid and financially stable ecosystem for all parties involved in the movement of goods from raw material to final consumer.
At its core, SCF involves a third-party financier (often a bank or a specialized fintech company) stepping in to facilitate payments between a buyer and its suppliers (which would be you, the exporter). The magic happens when a large, creditworthy buyer leverages its strong credit rating to allow its suppliers to get paid earlier at a lower cost than if the suppliers sought financing on their own. Here's how it generally works from an exporter's perspective:
- The Order: You, the US exporter, receive a purchase order from a large overseas buyer.
- Shipment & Invoice: You ship the goods and issue an invoice to the buyer, typically with standard payment terms (e.g., 60 or 90 days).
- Invoice Approval: The buyer approves your invoice, confirming the goods were received and are satisfactory. This approval is key, as it signals to the financier that the invoice is legitimate and will be paid.
- Early Payment Option: Instead of waiting the full 60 or 90 days for the buyer to pay, you, the exporter, can opt to sell that approved invoice to the SCF financier at a small discount.
- Immediate Cash: The financier pays you immediately (or within a few days).
- Buyer Pays Financier: At the original due date (e.g., 60 or 90 days), the buyer pays the full invoice amount directly to the financier.
