To close a deal, a foreign buyer gets its own bank to essentially guarantee payment with a letter of credit. Letters of credit offer two further opportunities for exporters looking to generate cash from their orders as quickly as possible. Sometimes you need to extend terms to a buyer in order to sell them goods. Once you have shipped the goods, you will receive an Acceptance Advice that indicates you have the right to receive payment after the negotiated term. You simply take the Acceptance Advice to a bank and ask them for the best discount rate they can give.
Banks act as intermediaries.
An exporter instructs his or her bank to transfer ownership only upon full payment. If payment is not made, the document of title, usually the Bill of Lading, is held by the importer's bank awaiting instructions. International banking networks are crucial to international payment options. Royal Bank has correspondent banking relationships with over 3,500 banks around the world. Financing as an export marketing tool Export financing can give entrepreneurs a competitive edge in closing foreign sales.