Some of the financial instruments that you can find in banks are:
Export Letter of Credit: allows payments to be made or received upon delivery of shipping or transport documents. Complies with the regulations of the International Chamber of Commerce. The issuing bank acts as guarantor of the transaction.
Collection of Export Documents: this consists of authorizing the bank to manage the collection of foreign trade documents. This way you save time, concentrate on your business and avoid complications.
Payment orders received for your Exports: you can receive your payments directly into your national checking account or into a USD account.
Advance Loans to Exporters: financial support that will allow financing the costs of the expor korea whatsapp number t process in Chilean pesos or foreign currency.
Financial Derivatives (forwards, exchange rate options and swaps): financial instruments that allow protection against variations in the exchange rate.
2.Factoring, Leasing and Forfaiting
When we make sales or transactions in the local market, we usually use the typical payment methods: cash, transfer or card. However, when making international transactions, there are usually difficulties or costs involved in the process that we had not considered.
On the other hand, although credit represents one of the most commonly used sources of financing along with the letter of credit, these require that the company has credit capacity and, therefore, is a credit subject, which not all companies meet. It is for this and other reasons that there are other less traditional instruments that allow financing foreign trade operations. These are: Leasing, Factoring and Forfaiting.
Factoring: with this tool, the exporter sells its invoices to a financial institution, which pays them immediately, generating liquidity by not needing to wait for the due date of the invoice. In exchange for this and taking charge of the collection, the financial institution will not cover 100% of the invoice amount, but will deduct a percentage for the risk assumed and leave another percentage that must be assumed by the issuer of the invoice. This instrument is very useful for businesses with high seasonality. Keep in mind that the authorization of this document will depend on the credit history of your buyer against whom you issued the invoice.
Forfaiting: It is not widely used in Chile, but you will find it in international banking institutions. In this instrument, the right to collect obligations arising from a foreign trade operation is sold. The financial institution will receive promissory notes or bills, assuming 100% of the risk of non-payment and, generally, collecting the interest in advance. In exchange for this, it will demand a percentage of the obligations. Although it is very similar to Factoring, its main difference lies in the fact that forfaiting is without resources, therefore, 100% of the operation will be covered and you will not have to have liquidity to cover a percentage of the transaction.
Leasing: This is a financing alternative that is mainly applied to used goods. It consists of a contract that establishes the rental or lease of an asset, in which a future purchase option is often established. This contract can be developed locally or internationally and its main advantage is that it does not require own resources or credits.
Each of these instruments has different requirements that must be consulted with the financial institutions you wish to contract.
3.Local and global investors
Corfo Foreign Trade Guarantee (COBEX):
The COBEX guarantee allows for the backing of credits that finance the export operations of Chilean companies, which can be in pesos, UF, Euros or Dollars. In this instrument, Corfo acts as guarantor of a percentage of the operation, supporting an eventual default in the payment of the credit.
Since financial institutions are the ones that can request the guarantee, you will have to contact them to complete the procedure.
Requirements:
Private companies (legal entities or natural persons with a business activity), producers of goods and/or providers of services.
Micro, small and medium-sized companies directly or indirectly related to foreign trade, with sales of up to UF 100,000 per year (excluding VAT) and exporting companies with sales of up to UF 600,000 per year.
Emerging companies with no history, but with projected sales of up to 100,000 UF per year and 600,000 UF per year if they are exporters.
Beneficiaries of investment projects on indigenous lands (without maximum sales limit).
The benefit has the following maximum amounts per company: