Trade Finance and International Trade

1903 Words Jan 25th, 2018 8 Pages
Negotiating strategy needed to reduce finance risk (Branch, 2005). Trade finance is a topic contained the financial facilities industry. Manufactured goods is sold and distributed to overseas; therefore, it takes longer to get paid. Additional time and energy is required to make sure that buyers are trustworthy and creditworthy. Also, foreign buyers who are just like domestic buyers. They prefer to delay payment until they receive and resell the goods. Outstanding carefulness and cautious financial management can mean the difference between profit and loss on each transaction. Another possibility will help debtors avoid common faults like securing the incorrect type of financing, underestimating the amount required or undervaluing the cost of borrowing the cash. Furthermore, trade finance generally refers to the financing of individual transactions or a series of revolving transactions.
2.0 Trade Finance Which Affects the International Trade
Sellers, as always need to get paid as swiftly as promising. On the other hand, buyers commonly prefer to postponement the payment, at least as long until they have received and resold the goods. Rapidly growing globalization level has created extreme competition for export markets. Both of the importers either exporters are looking for any competitive advantage that would help them to raise their sales. Flexible payment terms…