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The challenges take different forms: As a seller of goods or services, do you have enough resources to make advance payments and grant payment terms? And does the buyer have sufficient liquidity to meet obligations on time and make down payments?

In cross-border transactions, there’s also the question of how claims can be enforced in other countries. Is that simple or complicated? All these financing and risk mitigation challenges can be managed with trade and export financing solutions.

In principle, financing through existing working capital credit limits is the easiest and least expensive option. The prerequisite, however, is that you have sufficient liquidity or an adequate credit limit. This is often not the case with large orders.

In that case, a production loan backed by the Swiss Export Risk Insurance SERV can be a useful addition. It is always purpose-specific and comes with more formalities, but the insurance coverage opens up additional financing opportunities. What many don’t know: this insurance option also applies to subcontractors that don’t conduct international business themselves, but whose goods or services are exported as part of another product.

Many SMEs are familiar with this situation. A so-called documentary credit is a common instrument for financing and securing export transactions. This allows you to grant the buyer a significantly extended payment term.

Based on the defined documetary credit conditions, the buyer’s bank guarantees payment. You can also have �۶���Ƶ confirm this, giving you payment security under Swiss law as well.

To ensure you don’t have to wait for your money during long payment periods, you can apply for advance financing based on the documentary credit. This way, you receive the purchase price of your goods immediately, minus a discount interest charge.

A special case arises with payment terms of more than two years in large international projects. A tailored loan with SERV cover is suitable here.

Yes, absolutely. This is especially relevant for large orders or expensive products. Buyers typically don’t have the liquidity to pay within 30 days, which can delay the conclusion of the sale.

If companies are able to offer longer payment terms, the sale is usually concluded more quickly. This improves competitiveness, and ultimately increases revenue. Particularly in countries with high interest rates, offering such terms increases the chances of closing a deal.

�۶���Ƶ can directly support these subsidiaries through its branches in international locations such as New York, Frankfurt, Singapore or Hong Kong. When developing a financing solution for a subsidiary, we take into account the longstanding relationship that the parent company in Switzerland has with �۶���Ƶ. We also consider the relevant credit rating. This is often more favorable than a purely local financing solution based solely on the subsidiary.

That’s possible too. However, in certain countries, restrictions must be observed in order to repatriate the capital. We are seeing a trend where loans or equity are transferred to subsidiaries in local currencies. For example, a subsidiary in Brazil receives the required amount in Brazilian Real. Unlike financing in US dollars, for instance, this avoids unpredictable conversion rates and undesired final amounts. With Pay Worldwide, �۶���Ƶ now also covers these payment needs directly through �۶���Ƶ Digital Banking.