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Taking the Risk out of Export Sales

Taking the Risk out of Export Sales. Presentation to ‘finditinbirmingham’ 3 rd February 2011 Mark Hayward , MIEx (CITA) MJ Hayward Associates Ltd. Export sales – what are the risks?. Export sales – what are the risks?. Will I be paid? Buyer Risk Country Risk Performance risk

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Taking the Risk out of Export Sales

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  1. Taking the Risk out of Export Sales Presentation to ‘finditinbirmingham’ 3rd February 2011 Mark Hayward, MIEx (CITA) MJ Hayward Associates Ltd

  2. Export sales – what are the risks?

  3. Export sales – what are the risks? • Will I be paid? • Buyer Risk • Country Risk • Performance risk • When will I be paid? • Impact on cash flow • How will I be paid? • Method of payment • How much will I be paid? • Bank charges • Delivery terms – documentation & internal costs • Currency fluctuations

  4. Buyer / Country Risk • Information.... Information..... INFORMATION! • Credit Report • Country updates (war, sanctions, exchange controls) • Credit Risk Insurers • UKTI • Local Agents

  5. RISK LADDER Exporter Importer High Risk Low Risk OPEN ACCOUNT DOCUMENTARY COLLECTIONS   LETTERS OF CREDIT   ADVANCE PAYMENT Low Risk High Risk

  6. LETTER OF CREDIT • A written undertaking • given by a bank on behalf of the importer • to pay the exporter an amount of money • within a specified time at a specified place • provided the exporter presents documents • Which conform to the terms laid down in the letter of credit.

  7. Confirmed Letter of Credit • How strong is the issuing bank? • Country (political / economic) risk? • Added security from a UK based bank • Which bank and how much will it cost? • Consider financing against confirmed L/Cs

  8. Costs of Security • Credit Insurance • Risk appetite, premiums, debt collection • Letters of Credit • Trade Finance • Benchmark your bank or trade finance provider • Service, structures, costs

  9. About MJ Hayward Associates Ltd...... • Export training and consultancy support • In-company courses – groups and 1:1 • 32 years experience in International Trade Finance • Institute of Export accredited • Access to leading trainers and support services • Export Sales, Risks, Documentation, Incoterms, Customs

  10. Taking the Risk out of Export Sales Mark Hayward, MIEx (CITA) MJ Hayward Associates Ltd www.mjhayward.co.uk Phone: 0800 043 4052 Email: info@mjhayward.co.uk

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