Florida Export Finance CorporationNovember 7, 2011
Prepared for the Greater Caribbean American Chamber of CommerceThe Latin Chamber of Commerce of Broward CountyThe Florida House of Representatives
Do we have to be Einstein to figure it out?
Because our company can have more revenue ! Because we can hedge against a diminished
domestic market Because we are in Florida, and have a geographic
strategic advantage Help America by exporting USA and Florida have key strategic organizations
that will assist us in our exporting efforts
Advisor? Consultant? Friend?
MYTHS TRUTHS
It is very difficult We need to speak
foreign languages I will not get paid I need to travel to
dangerous places I need a lot of capital to
do it
It is simple if we apply common sense
We need English We will get paid or
collect credit insurance No travel should be done
where the State Department has issued a recommendation
Traded finance assistance from the federal and State governments is available
1) Take a step at the time ( start with baby steps)
2) Use credit insurance or safe collection methods ( letters of credit, cash advances)
3) Have positive cash flow 4) Use somebody else’s money to
finance exports 5) Use the government fine state and
federal programs
Identify products and potential market Approach a coach….basically YOU!!!! Set up a marketing strategy Set up an appropriate financial “engine” Review the exporters “Checklist” Prepare measures for each item of the
checklist if applicable Promote that exporters share their
experiences
Quotes, biddingsProduct SpecificationsProduct / Country Norm compliancesPriceDelivery ( time, mode, packaging, etc)CompetitionTermsDomestic versus international policies#@!!!XX##&@@%!XZFinance and cash flowMarketing, trade shows
Open account transactions Cash advance transactions Letters of Credit Concept of Added value Eximbank Insurance Private Insurance Political Risk insurance
Exim Bank Private One customer Many customers Credit limit Delegated authority Due diligence Deductible Psst…pass along to the cost to the
importer!!!
USE A CREDIT INSURANCE BROKER
What is the fine line difference in an exporter between boosting and busting?
CHRONIC LACK OF CASH!!!!
Are receivables invoices cash? How about a loan to be given to us
next Monday? Is inventory cash? Gold below our mattress ? Prepaid expense is it cash?
Lack of sleep Constant sweating Delays in delivering products Collectors demanding payment Past due invoices Worried employees
Take sleeping pills… Borrow more money from Bank Have your vendors increase their credit to
you, collect more from customers Take payroll of employees and gamble it a
the Hard Rock? Look for investors or at worst loan sharks And….Also…
Break your piggy bank and gamble your family’s secure position…
PAY DIVIDENDS, salary increases and bonuses too!
Marketing and Sales effort Export financing credit facilities Working capital facility ( WCG, FEFC) Inventory financing Credit to Buyers ( large companies) Credit short term, medium and long term Invoice discount facilities Purchase order is the trigger for positive cash flow
exporting
Pre export = more Inventory
Post export = more accounts receivable
Foreign Invoice + Insurance= collateral
Inventory + Guarantee = collateral Collateral transforms to a loan to
exporter When importer pays, extinguishes
the loan And renews credit line One year cycles
Pre Export Financing Post Export Financing Combination of Pre and Post Export Foreign Investment Financing Any aspect of Foreign export Related Business
TRADE FINANCE
Export $ 100,000 cost $70,000, 150 days credit Draw (borrow) $ 70,000 from FEFC’s guarantee
line-POSITIVE CASH FLOW from financing Invoice $ 107,000 ( assume financial expenses
5%, 2% set up fee + 1%/month)) Bank releases 90% of invoice ( 0.9x107k) 96,600 and pays for the $70,000 so now
$26,600 POSITIVE CASH FLOW from operationsWhen customer pays bank : $107,000 less
advance and financing costs ($ 96,600) exporter pays invoice discount facility and receives $10,400 POSITIVE CASH FLOW from operations
City State partner of Exim-Bank EDN loan and PRI originator OPIC Assist in getting into a federal or State program ( USDA, SBA etc) Financial Advisor Private Insurance Forfaiting Other sources of funds Assistance in getting you a bank interested in
International Business ,
Not for Profit Created By State Legislature Quasi-government institution Self sustaining 1.8 Billion in export assistance in 14
years ( 120MM/yr) Unique structure Private information of customers Over 2,200 companies have received
our assistance
FREE SERVICE FEE SERVICE ( small application fee
and a success fee)
Free advice on demand 24/7Fee Service. Application$250.00 check ( in Case of Eximbank also $
100.00 fee for letter of interest)Pre export guarantee ( 3% year up to $ 500,000)Medium or long term loan ( $ 2,500/$5,000 + ½
% success fee)OPIC loan or guarantee ( same policy as Medium
term loanSales techniques and theater $ 600.00/one dayOther types of specialized consulting (donation)
You will never think back the same Strong medicine against negative cash flow disease Become an export skipper Meet nice bankers, Use somebody else’s money to finance growth of your turn
over ( it will have some financial costs ,of course) More competitive Pay your bills in time Deliver your customers in Time You will make more money
And the most important…
Companies with positive cash flow…
Pay dividends…
Roberto Rivera Vice President 10400 NW 33 St. suite 200 , Miami,
FL 33172 (305) 786-845-0400 (305) 786-845-0404 E: Mail [email protected] WWW.fefc/biz
That will steer your company out of trouble and lead it to ultimate success!!!
Please call us, we are always at your service!
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