
Exporting is in the spotlight for small businesses in Europe at the moment. A whole range of initiatives focus on encouraging international trade as the basis for “export led growth”. There is research to show that exporters account for 60 per cent of UK productivity growth; companies that start exporting experience 30 per cent and more growth in productivity.
Despite the opportunities associated with exporting however, many SMEs are still reluctant to go overseas – unsurprisingly, given some of the obstacles they face. These range from tricky market research and studying foreign legal systems to grappling with unfamiliar standards and cultures, not to mention the often complex administrative procedures associated with the exporting process. Amongst all this, one significant factor that is often overlooked is finance, an area which can be notoriously treacherous for small firms. Moving your activities abroad adds an extra layer of risk, which means that a small business owner has to work extra hard to reassure lenders. Various additional considerations will need to include the creditworthiness of your foreign buyers (which is often more difficult to obtain than it might be for domestic ones), as well as the wider economic and political environment of the foreign buyer’s country of operation. On top of this, the foreign currency fluctuation and impact of additional risk on the cost of finance, as well as the longer lead times associated with shipping products and receiving payment will doubtless have an impact on the working capital needs of a mid-sized business.There are financial products available that are specially geared towards exporters
These can help you handle the extra risk associated with exporting by insuring your invoices against non-payment, export working capital loans and protection against foreign currency exchange rate movements. These products are unique to international trade, so do make the most of them;Choose your bank carefully
Financial products related to exporting are likely to vary from bank to bank and making sure you go to a bank that is most geared to your export financing needs will be of paramount importance. This may even include branches in the country where you are looking to do business. Crucially, make sure you know the charges that apply to any specialist products they offer.If exporters are experiencing difficulty getting the support they need from their bank
Rosana Mirkovic is the head of SME Policy at the Association of Chartered Certified Accountants.
If you have an export success story to show for, you should nominate yourself for the Growing Business Awards 2012, as Export Champion of the Year.
Share this story