Export Financing: Alternative Options

1. Export Financing: Alternative Options Samantha Forbes August 9, 2017

2. AGENDA Local vs. Int’l Transactions Financing Challenges Financing Options

3. LOCAL vs INT’L TRANSACTIONS • International or Export require more CASH resources than local: • Exporting is a longer cycle • Local trade is done within the same geographical location/country- export is across borders • Shipping costs • Customs fees • Exchange rate fluctuations • Freight insurance • Export transaction involves greater risk! • GOAL: Get paid in full and on time • Business involved in export must offer attractive sales terms to be ahead of competitors

4. FINANCING CHALLENGES The number one challenge for SMEs is the lack of access to capital • Funding gaps relate to firm size, risk, knowledge and flexibility • Borrowing requirements are small and usually do not appeal to financial institutions • Issues with collateralization

5. PERSONAL FINANCING Adjust the way you do business • Sell non-essential (high value) personal assets. • Cut expenses – Both business and personal. • Consider outsourcing or contract manufacturing. • Savings

6. REVENUE-BASED FINANCING

7. CREDIT CARDS • A number of companies provide credit cards designed for business use offering low to zero percent introductory rates • Interest rates after this free or introductory period is often in the double digit however, so only those entrepreneurs with the discipline to manage this for of cash should consider it.

8. EQUITY FINANCING Investors provide the capital needed for a stake in the company. Business Angel: someone with wealth provides capital for business, particularly start-ups. This capital injection is normally in exchange for convertible debt or ownership equity. http://firstangelsja.com/about/ https://www.caribbeaninvestmentnetwork.com/ http://alphaangels.co/ http://link-caribbean.com/ An online platform that aids the access of finance via small amounts donated by a large number of people www.kickstarter.com www.indiegogo.com www.rockethub.com https://www.isupportjamaica.com/ Funding provided to small firm deemed to have great potential and also to companies that wish to expand but do not have access to equity market http://theinnovatorsja.com/

10. COMPETITIONS • Almost all business competitions have a cash prize • However: • Many hours of time and preparation required • A good short term financial option, not a long term financing strategy Scotiabank Entrepreneurial Challenge; CEDA Breakpoint Series, NCB Capital Quest

11. GRANT FUNDING • Non-payable financing provided by government, nonprofits or other organizations to eligible applicants • Usually targeted to specific industries/sectors • Highly competitive and requires extensive reporting and tracking on how funds are being used • Usually available on a reimbursable basis

12. AWARD PROGRAMMES • Marketing • Increase in Credibility • Mentoring and Coaching • Cost Savings • In-Kind Benefits

13. How about asking your customers to fund your business? They may want to Request a

14. THANK YOU www.tradeandinvestjamaica.org E: info@jamprocorp.com