Credit Manager Magazine 9/2021

46 CREDIT MANAGER MAGAZINE WRZESIEŃ / SEPTEMBER 2021 3 scenarios where you should use international invoice finance In a 2019 report the World Trade Organisation estimated that the ‘vast majority’ of the United States’ $23 trillion in annual global trade relies on some variety of financing or guarantee between buyer and supplier. Stenn International Ltd. During the past year and a half, the COV- ID-19 crisis has complicated the relationship between buyer and supplier by disrupting the economy and global supply chains. India and China saw growth in exports weaken over the course of 2019-2020. Similarly, services exporters in Brazil recorded negative year- on-year growth in three out of four quarters. The pandemic underlined how important digital operations are in keeping trade flow- ing. Technological innovation continues to be a driving force for successful international e-commerce and trade, and is helping com- panies bounce back. For suppliers of export goods, digital trade financing encompasses a range of servic- es: bank working capital loans and letters of credit; invoice financing, which involves either advances against accounts receivable or outright selling of invoices to a financing company (factoring); or even payment guar- antees such as credit insurance. There’s a high demand for trade financing. However, the option is not always available to small or medium exporters. The Asian Development Bank calculates the unmet de- mand for trade financing to be $1.5 trillion globally, with exporters in Asia feeling the most acute need for solutions to solve their working capital crunches. So, when should you use international invoice financing? What is International Invoice Finance? Invoice finance solves a classic dilemma in international trade. A supplier wants to get paid at the time the goods are shipped. On the other hand, the buyer prefers open ac- “Invoice financing is a standard solution for domestic trade in many countries and is gaining more attention in cross-border trade.” BUSINESS