Hochschule Offenburg Export Finance: Structuring Transactions

This report provides a comprehensive overview of export finance, detailing the operations of an export finance department within a bank. It explores the department's role in assisting businesses with international trade, emphasizing the importance of financial assistance for both small and large enterprises. The report outlines the crucial steps involved in structuring export finance transactions, including client assessment, payment methods, risk mitigation, and financing tools. It also covers the time frame required for setting up export financing deals, from account establishment to plan execution. The report highlights the benefits of choosing the bank for German corporate transactions, such as long-term financing and cash-as-you-ship terms. Furthermore, it discusses the bank's competitive advantages, including global presence, certainty of payment, and risk mitigation strategies, alongside additional services like bid and performance bonds and export risk insurance. The report references several academic sources to support its findings and concludes with an invitation to partner with the bank for export financing.

Course code
Unit Name
First Name
Last Name
Name of institution

Introduction to export finance department
• This is a bank department that deals with any form
of financial help to businesses or other financial
institutions that ship their products to other
countries for sale (Kidwell, 2016). This department
comprises the export finance officers. It gives
financial assistance to the businesses to be able to
reach out to their clients globally. A business
whether small or big needs financial assistant that
can be able to simplify their transactions through
trade financing (Ehrhardt, 2016).

• Export financing will help the exporter get to win
tenders and contracts across the world. The export
finance deals always comes up with insurance and
this will get the client risks catered for.

• Export is normally considered a journey that is
long and it calls for a complete understanding of
all the market dynamics which is arrived through
assessment of Each of the target markets. This
can sometimes be not possible due to limited
availability of funds.
• Aforementioned, the client can get a relationship
with us by opening a bank account and within six
months we can be able to finance his market.

• To come up with the best strategy, several key
elements has to be considered which include
financing, commitment and focus on the
market.
• The other important thing is establishing a
lasting relationship with international clients

Crucial steps to be followed when arriving and closing a
transaction
• When deciding on whether to offer any form
of financial assistance to any of the client, the
financing bank is supposed to follow some
steps so that the risk can be minimal. This
means it must have done an intensive
research of the client in question. By following
these steps, it’s what produces a detailed
report on the plan of export financing. This is
done mostly by the export finance officer.

The crucial steps that can be followed to arrive in a transaction include the
below;
• The client must have been in operation with
the financing bank for at least 6 months
• Identification on the main method of payment
that will be used
• Identification of the risk mitigation ways
• Deciding the financing tools

• The financing must be well secured even with the
collateral assets
• An export LC must be provided for back up
• A pro forma invoice must be provided (Bhogal,2019).
• Export declaration form if only required

Tools that will help a client get a competitive advantage
• Having a protection against default in
payments
• Provision of long term credit facilities of more
than 180 days
• Establishment of pay as you ship terms

Time frame required for setting up the export financing deal
• The setting up of the export financing would
require a minimum of 6 months for the client
to have operated the account. This will involve
deposits and withdrawals within the financing
bank. For a dormant account, the approval
may not take place. However, the approval
may not place for an active account that
hasn’t been having any transaction.

Steps to be followed in export finance
• Do a summary of initial research that has been
done
• Detailed check of the German corporate
SWOT analysis
• Listing the main objective of the financing
bank

• Preparing of the export budget of the
financing bank (Corbo, 2019)
• Preparation of the detailed schedule to
implement the export financing
• Presentation of the export financing plan