Factoring and the Opportunities of Joint Ventures Between International Finance/Factoring Companies and Domestic Finance/Factoring Companies in the Facilitation of Export Financing in the United States of America

Author

Farhat Shahzad, Fontbonne College

Year of Award

1986

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

Foreign Trade, Economic Recovery, Exports, Imports, International Trade, European Factoring

Abstract

The United states is experiencing unprecedented deficits in its foreign trade accounts, a development which underlines the vital importance of a strong export sector. At the same time, the financial crises in Latin America, traditionally a strong market for U.S. capital goods; the slow pace of economic recovery abroad; and the continued strength of the dollar mean that export growth will not come easy. Competitive finance terms are a crucial element in the export marketing package of U.s. manufacturers, and companies engaged in export trade must depend to a great extent on an outside source of financing.

Financing exporters for the orders received, however, is not a complete solution of exporter's problems, because finance for the order is only one.need of the exporter. The other and the most important need is to collect the funds from the importer after the order is served. This need, usually, does not turn into a nightmare if the traditional way of export is adopted (i.e. Draft Against Documents or Letter of Credit etc.) However, the usage of traditional tools to conduct export business today is becoming more and more unattractive to importers because of the complexities involved in today's business world. Importers want a better investment for their money or credit line instead of being forced to wait for an order from a foreign country that might take several weeks and in some cases, even months.

This study will explore the opportunities for an export financing service that takes almost all the risks away from exporter and makes export as easy and 'risk-free' as running a local operation; that offers importers 'open account' and saves him from all the problems and expenses involved in opening a Letter of Credit or arranging a Draft Against Documents.

This service can be offered by either an international finance/factoring company or a local finance/factoring company with the help of an international finance/factoring company. This study will analyze the factoring operation in detail and discuss the opportunities for joint ventures between local finance/factoring companies and international finance/factoring companies in the facilitation of this service to U.s. exporters.

Document Type

Restricted Thesis

Recommended Citation

Shahzad, Farhat, "Factoring and the Opportunities of Joint Ventures Between International Finance/Factoring Companies and Domestic Finance/Factoring Companies in the Facilitation of Export Financing in the United States of America" (1986). All Theses, Dissertations, and Capstone Projects. 636.
https://griffinshare.fontbonne.edu/all-etds/636