In today’s complex global business environment, companies with overseas operations or trading partners often need to form relationships with local banks overseas. By taking advantage of services like international accounts, international risk management, financing, payment and collection services, and transaction and account information reporting, you’ll be able to better compete globally. You’ll also be able to take advantage of international services for travel and personal banking needs.
“All companies, both large and small, can take advantage of international banking services,” says Alice Chen, a vice president and commercial banker with the Wells Fargo Business Banking Group. “With effective cross-border banking solutions, you’ll get the benefit of one-stop banking for both your international and domestic accounts.”
Smart Business spoke with Chen about utilizing these banking services to expand your business globally.
What are some typical international banking product offerings?
Typical financing products help customers receive the credit they need to achieve their global business goals. If you require export financing or are looking to open an office or subsidiary overseas, government-guaranteed loans, cross-border lending programs and foreign accounts receivable purchasing can help finance international growth.
Some typical financing products include:
- Trade cycle financing — Fund each stage of a trade transaction, instead of outlaying the total base amount. Get advances on import shipments of up to 100 percent of purchase price.
- Letters of credit (LCs) — Improve cash flow in the U.S. or Asia by using import, export, standby or prepaid LCs.
- Documentary collections — Expedite processing and reduce sales and transfer costs of funds and goods.
- Short-term financing — Increase the credit available for short-term financing in your asset-based credit line by including uninsured foreign accounts receivable in your borrowing base. The ability to include these receivables in your borrowing base is extremely valuable and is designed for experienced exporters with well-established buyers in Europe, Canada and Japan.
- Medium-term financing — If you are a U.S. exporter, you can offer overseas customers attractive credit terms and significantly reduce non-payment risks. This export financing covers most non-project-related credit extensions for capital equipment exports.
- Ex-Im Bank Working Capital Guarantee Program — Accelerate overseas sales payments for your export business. Get financing on your foreign accounts receivable or inventory, including work in progress. This pre-export working capital financing is 90 percent guaranteed by the Export-Import Bank of the United States.
- Export-risk mitigation — Structure trade transactions to maximize cash flow and minimize foreign risks associated with exporting. With the sale of short- and medium-term trade receivables to the bank, in many cases, without recourse to you, you can enhance your competitive position.