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  • Small Business Finance - Information and guidance on how to finance your business.
    it gets in is greater than the money it pays out Managing Your Cash A business can only survive in the long run if the money it gets in is greater than the money it pays out Businesses need to make profits to stay in business but many businesses can cope with short periods during which their expenses are greater than their income No business can survive without cash Businesses

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/own-funds (2016-02-16)
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  • Small Business Finance - Information and guidance on how to finance your business.
    but trading partners should aim for arrangements that are mutually beneficial An importing or exporting business should consult with its bank to consider the range of trade financing options available and to find a solution that fits its needs The main trade finance options include open account transactions collections letters of credit and cash in advance While open account is the most secure for importers offering free access to short term trade credit it is is risky for exporters as they are not assured of payment Similarly cash in advance is most secure for exporters but importers must accept the risk that goods or services may not be delivered or meet the standards or requirements expected Bills of Exchange Financing The bill of exchange can be used to access bank credit A bill of exchange or foreign bill negotiation is an advance from the bank for up to 100 of the face value of the bill of exchange The bank recovers the proceeds from the sale from the importer and charges interest on the credit provided to the exporter The negotiation may be with recourse where the exporter must refund the bank if the buyer does not pay up or

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/trade-payment-options (2016-02-16)
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  • Small Business Finance - Information and guidance on how to finance your business.
    are shipped Cash in Advance Payment by cash in advance or prepayment means that the importer pays in full for the goods before they are shipped In this situation the importer rather than the exporter assumes the risk of non payment Exporters may require cash in advance when accepting orders from new customers or customers whose creditworthiness is poor or unverified when exporting to markets with substantial political or economic

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/cash-in-advance (2016-02-16)
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  • Small Business Finance - Information and guidance on how to finance your business.
    exporter s bank if the exporter provides all the documents specified in the letter of credit Because the L C is a form of credit the importer must apply for credit approval from its bank The L C agreement between the buyer and seller is separate from the sales contract and while the sales contract is fulfilled when the seller provides the requested goods in exchange for payment the L C agreement is fulfilled when the necessary documents are exchanged by the importer and exporter s banks Payment under an L C may be at sight i e when the importer s bank is presented with the necessary documents or at usance i e where payment is made after a specified time after sight or shipment date Variations on normal letters of credit include Transferable L C this allows a beneficiary such as an export broker to pass on the payment benefit of an L C to one or more third parties such as a manufacturer or wholesaler Revolving L C this may be used where regular deliveries are made over a period of time and allows an importer to use a revolving clause in the letter of credit The issuing bank restoring the credit amount each time the credit is used or drawn down Confirmed L C where the exporter may have reservations about the importer s bank or its country of origin the exporter may seek a confirmed L C through which a second bank usually in the exporter s country and at the request of the exporter also commits to pay the seller for the goods upon fulfilment of the conditions of the documentary credit confirming the L C Standby L Cs this is very similar to a bank guarantee and is intended to be used in

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/letters-of-credit (2016-02-16)
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  • Small Business Finance - Information and guidance on how to finance your business.
    it is riskier for the seller as the bank only facilitates the transactions and does not guarantee payment The exporter ships the goods and presents its bank with the shipping documents and instructions to seek payment The exporter s remitting bank presents these documents to the importer s collecting bank Documents may be released by the collecting bank to the importer in two ways Documents against payment D P or cash against documents CAD collection where the documents are only released to the importer when is makes the payment to the collecting bank As with L Cs payment under D P may be at sight or after a specified time after sight or shipment date Documents against acceptance D A collection where the exporters extends credit to the importer by providing them with a time draft bill of exchange The documents are released to the importer when it confirms acceptance of the time draft and it commits to make payment after a specified time The collecting bank then forwards the proceeds to the exporter s remitting bank which credits the exporter s account D Cs are typically used when the trading partners have a well established relationship and an L

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/collections (2016-02-16)
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  • Small Business Finance - Information and guidance on how to finance your business.
    is short term finance for a business such as a manufacturer or wholesaler to finance the gap between the purchase of and payment for raw materials or goods and the sale of and receipt of payment for finished goods Invoice Discounting Factoring Businesses use invoice discounting or factoring to access working capital and improve their cash flow Banks and other lenders advance a business a proportion of its outstanding invoices

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/other-trade-finance (2016-02-16)
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  • Small Business Finance - Information and guidance on how to finance your business.
    short term finance for a business such as a manufacturer or wholesaler to finance the gap between the purchase of and payment for raw materials or goods and the sale of and receipt of payment for finished goods Invoice Discounting Factoring Businesses use invoice discounting or factoring to access working capital and improve their cash flow Banks and other lenders advance a business a proportion of its outstanding invoices with

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/credit (2016-02-16)
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  • Small Business Finance - Information and guidance on how to finance your business.
    to meet its obligations under a contract Buyers usually require on demand or unconditional bonds which can be called without challenge while exporters may seek conditional bonds which require substantiation such as through an independent arbitrator Tender Guarantee Bid Bond This provides the beneficiary with financial compensation or remedy if an applicant does not fulfil any of the tender conditions such as not taking up a contract awarded through the tender process This may be submitted with other documents required in the invitation to tender particularly in international trade situations and remain valid during the period of tender plus a grace period to enable the beneficiary to make a demand Performance Bond This type of guarantee is commonly required at the time of start of a contract and provides the buyer with financial compensation is the exporter or supplier fails to fulfil the terms of the contract Advance Payment Progress Payment Guarantee This may be used if an importer or customer must make advance or early stage payments and guarantees that the beneficiary will be refunded if the exporter or contractor fails to complete a contract The amount of the refund will depend on the nature of the guarantee and should provide for pro rata refunds so that the value of the guarantee is reduced as work progresses with progress clearly documented Warranty Maintenance Bond This provides the buyer with a financial guarantee to cover the satisfactory performance of goods services usually factory plant equipment and other capital supplied during a specified maintenance or warranty period Retention Bond The supply of capital goods such as factory plant or equipment may be agreed subject to the buyer withhold a small proportion of the contract amount for a period after supply of the plant and machinery The exporter may choose to receive

    Original URL path: http://www.smallbusinessfinance.ie/develop-business-overseas/category/guarantees-bonds (2016-02-16)
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