Module 4.2 Financing and Getting Paid

Workbook

Stage 4 – Entering the Market

Module 4.1 Market Entry Options

Module 4.2 Financing and Getting Paid

Module 4.3 Contracting and Legal Aspects

Participant Name
Company Name
Date

SERVICES Go Global is delivered in the Caribbean by the Coalitions of Service Industries (CSIs) who are members of the Caribbean Network of Service Coalitions (CNSC).

This programme was developed by Global Links Network Canada and associates. Materials may not be copied or reproduced without express permission. Coalitions of Service Industries and authorized trainers of the programme may reproduce according to terms and conditions specified in the trainer agreements.

SERVICES Go Global has been made possible through the generous support of the Caribbean Export Development Agency and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

Table of Contents

4.2.1 Planning Your Financing 3

Difficulty in Financing Services 3

Typical SME Financial Challenges 3

Financial Institutions and the Service Sector 3

Your Company’s Needs for Financing 4

Assessment of Your Company’s Financial Reporting Processes 4

Sources of Financing 5

4.2.2 Market Development Financing 6

Financing Market Research 6

Financing In-Market Visits 6

Financing Participation at International Events 6

Financing the Preparation of Detailed Proposals 6

Financing through Partnerships 6

4.2.3 Project Financing 7

Project Financing Options 7

Maximizing Cash Flow for Project 7

4.2.4 Getting Paid 7

Primary Methods for Payment of International Transactions 7

Understanding of International Payments 7

© Global Links Network

4.2.1 Planning Your Financing

Difficulty in Financing Services

In point-form, indicate the three main reasons why it is difficult to finance the export of services.

Financing exports of services is difficult because…

Typical SME Financial Challenges

In point-form, outline some of the reasons why SMEs always indicate that financing is their biggest challenge.

SME Financing Challenges

Financial Institutions and the Service Sector

In point-form, outline reasons why most financial institutions do not understand SME service firms.

Financial Institutions and the Service Sector

Your Company’s Needs for Financing

Referring to the topics presented in this module, outline your company’s primary needs for financing, with specific mention of expansion into new markets.

Our Primary Financing Needs

Assessment of Your Company’s Financial Reporting Processes

Financial Reporting Processes / Yes / No / Not Sure
1.  Does your company produce a full set of financial statements on a timely and professional basis
2.  Do your financials include a Balance Sheet, Income Statement and Cash Flow Statements/Projections?
3.  Do you have internal staff capable of preparing financial statements?
4.  Do you prefer to outsource this function to specialists?
5.  Does your management team fully understand how to analyze financial statements and make informed decisions about the future growth of the company?
6.  Is your management team capable of using your current financial processes to project and plan for expansion into international markets?
7.  Have you considered options for maximizing your profitability and cash flow?
8.  Can you obtain enough capital or lines of credit to cover the costs for market development and managing cash flow?
9.  Can you find ways to reduce the financial risks of international trade?
10.  Can you find people to advise you on the legal and tax implications of exporting?
11.  Can you deal effectively with different monetary systems?

Sources of Financing

Equity Financing / Currently use / Should explore for domestic business / Should explore for international business
1.  Personal savings
2.  Friends and relatives
3.  Angel investors
4.  Venture capital
5. 
6. 
Debt Financing
1.  Leasing
2.  Term loans
3.  Credit cards
4.  Bank overdrafts
5.  Loan programs
6.  Trade credit
7. 
8. 
Summarize your Action Plan for Improving your Financial Processes

4.2.2 Market Development Financing

Outline options for securing financing for market development for each of the following areas:

Financing Market Research

Financing In-Market Visits

Financing Participation at International Events

Financing the Preparation of Detailed Proposals

Financing through Partnerships

4.2.3 Project Financing

Outline possible options for financing specific projects and indicate the probability of success.

Project Financing Options

High / Medium / Low
1. 
2. 
3. 
4. 
5. 

Maximizing Cash Flow for Project

Outline possible options for managing project cash flow and indicate the probability of success.

High / Medium / Low
1. 
2. 
3. 
4. 
5. 

4.2.4 Getting Paid

Outline the four common ways for payment of international transactions, and indicate which apply for trade in goods, and which apply for trade in services.

Primary Methods for Payment of International Transactions

Payment for Goods / Payment for Services
1. 
2. 
3. 
4. 
5. 

Understanding of International Payments

Indicate which of the following your organization either has experience in, or is sufficiently knowledgeable to initiate.

Yes / No / Not Sure
1.  Cash in advance (or establishing milestone payments)
2.  Letters of Credit
3.  Documentary Credits and Collections
4.  Open Account
5.  Factoring Accounts Receivables
6.  Initiating or receiving wire transfers
7.  Managing foreign exchange risks
8.  Other
9.  Other

SERVICES Go Global – V1.1/2014 8