Trade Finance

by Bob Lyddon
access120 days access
cpd hours4 CPD hours

This course will enable you to:

  • Understand how best to source foreign supplies for your organisation
  • Formulate your business plan and explore what business models are appropriate
  • Agree commercial and financial terms of supply
  • Understand long-term trade financing options and the risks associated with them

Inevitably, international trading holds more risks than domestic. Whether you are selling direct overseas, or running overseas subsidiaries, you need to understand the risks involved and how to operate effectively.

This course explores how to formulate a plan for your approach to foreign sales markets, making and collecting payments, the time-cycles involved in foreign trade, as well as highlighting risks and the contexts in which they arise.

Foreign sources of supply

  • What do you need to know about your organisation?
  • How well do you know players upstream in your industry supply chain?
  • What are the costs of sourcing foreign supply?
  • What business models do foreign suppliers use?
  • How should you engage with new suppliers?
  • How should you engage local support?
  • How should you formulate your business plan?
  • How do you sense-test your business plan?
  • What do you need to consider before contracting with overseas suppliers?

Foreign sales markets

  • How well do you know players downstream in your industry supply chain?
  • What are the different market sizes?
  • What is your potential market share?
  • What are tangible business restrictions?
  • What are tangible financial restrictions?
  • What are intangible restrictions?
  • What business model should you use to enter a foreign sales market?
  • How do you engage with foreign buyers?

Securing supply and paying for it

  • How do you contract the terms of supply?
  • How do you agree the terms of payment?
  • How easy is it to start a new overseas company?
  • What are the tax considerations for your company?
  • How can you fund your payments?
  • What do you need to set up a foreign bank account?
  • What are the benefits and challenges of foreign bank accounts?
  • What financial tools are required to pay for the offtake?
  • What types of payment guarantee might an exporter ask for?
  • What do you need to consider when making cross-border payments?

Making the sale, financing it, and getting paid

  • What should you consider when contracting to supply?
  • Why establish a sales channel?
  • When should you send the invoice?
  • How can you minimise float?
  • How should you collect payments?
  • What is credit insurance?
  • Why might you want a buyer to accept a Bill of Exchange?
  • What services do banks offer?
  • Who takes the risks on a bank payment obligation?
  • What is pre-shipment finance?

Long-term trade finance

  • What is export finance?
  • How were projects funded in less-developed countries?
  • How was export credit used in the Western world?
  • How did "country risk" catch up with OECD banks?
  • How are major capital projects financed now?
  • What are the risks of financing a capital project?
  • What are the different types of bonds?
  • How do you structure term financing?
  • How does a supplier credit work?
  • How does a buyer credit work?

Bob Lyddon is an experienced management consultant both privately and with PwC. Recent engagements include running the IBOS international banking alliance, designing a cross-currency notional pooling service, advising a UK association of payment providers how to access UK and international payment systems, and advising a major player in global payments as to the opportunities and threats arising from the establishment of a new regulator for the UK's payment systems.

Bob is on the faculty of trainers for the UK Association of Corporate Treasurers, and regularly contributes to industry conferences and periodicals.

With PwC, Bob managed several programmes at the time of the initial introduction of the Euro, and prior to that, in a career in international banking spanning 17 years, Bob designed the "Connector" payments network for Bank Boston, and arranged numerous syndicated loans and derivatives transactions for Chemical Bank/Manufacturers Hanover and for Lloyds Bank International.

Bob Lyddon holds a First Class degree in Modern Languages from the University of Cambridge.

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