United States Small Business Administration
Office of Advocacy
RS 168
_______________________________________________________________________________________________
_______________________________________________________________________________________________
Purpose
There is a longheld belief that lack of financing is one
of the principal obstacles to small firm exporting. Export finance
generally encompasses two activities: (1) working capital financing,
usually in the pre-shipment stage; and (2) very short-term financing
accompanying the use of different payment mechanisms typically
employed after shipment. The purpose of this study is to examine
the financing issues faced by small exporters, including availability
of trade financing and costs associated with financing and payment
settlement.
Scope and Methodology
The study examines the prevalence and costs of working capital
financing among small exporters; payment mechanisms; the costs
of export finance for manufacturers versus nonmanufacturers
and export management companies; the role of the banking and finance
sector in export finance markets; awareness levels of export finance;
and use of alternatives in export finance, including transaction
finance firms.
A literature search was undertaken to identify trade finance issues
for small businesses in the United States. This was followed by
a series of loosely structured telephone interviews with 60 U.S.
exporters (identified from a list maintained by the Small Business
Foundation of America). The interview questions focused on export
activities and experience, financing requirements, payment mechanisms,
perceptions about export finance issues, and firm characteristics.
For information on the providers of export finance, in-depth
interviews were conducted with nine suppliers of trade financing,
including banks and financial firms.
Also for this study, the costs and practices of a major trading
partner were examined as a comparison to gauge U.S. trends. Because
of its similarities to the United States in trade environments,
the Federal Republic of Germany was selected.
Highlights
Ordering Information
The complete report is available from:
National Technical Information Service
U.S. Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4650
(703) 487-4639 (TDD)
Order Number: PB96 181300
Cost: A07/$28.00; A02/$14.00 Microf.
*Last Modified 6-11-01