Trade Aid
By Cynthia E. Griffin
Just when small businesses are venturing into the waters of international trade in ever greater numbers, big banks are slowly easing out of the financing side of international business, leaving a growing hole in the market. In California, one smaller bank is stepping into the breach.
"We specialize in trade financing and offer lines of credit of up to $10 million," says David Wong of the Pacific Bank's Los Angeles branch. "We target companies with sales ranging from $1 million to $50 million, but we cater especially to small business."
The Pacific Bank, which works almost exclusively in California, helps with letters of credit for existing and start-up companies whose principals have prior experience in an industry. The bank will also help facilitate production once there is a confirmed letter of credit and a purchase order.
Wong offers a few tips for getting bank financing:
* Talk with your attorney or CPA to find banks that might be good
trade finance partners.
* Look for a bank and loan officer with at least two to three
years' experience in trade finance. Also make sure the person
is knowledgeable about programs (government and private) available
to help you import and export.
* Seek an institution that targets importing and exporting in
general, not just one segment of the market.
* Choose a bank big enough to have an international department but
small enough to truly want your business. Banks without
international departments may offer to act as your correspondent
with an international bank, but keep in mind this simply adds
another layer of people you have to work with.
* Finally, if you only handle one transaction a year worth under
$5,000, don't look for trade financing. It's not
cost-efficient unless you have multiple deals of this size.
Entrepreneur Editors' Picks
-
Crypto Doesn't Have to Be Serious. Just Ask This Comedian Who Organized a Conference About Failure in the Industry.
-
Want to Succeed? Turn Your Fixed Mindset Into a Growth Mindset.
-
Google's CEO Is Asking Employees 3 Simple Questions to Boost Productivity
-
'Greatest Storyteller Wins.' Katy Perry on the Surprising Link Between Pop Stardom and Entrepreneurship.
-
How to Unleash Your Creativity and Transform Your Marketing Strategy
-
The 5 Personalities You Meet in a Coworking Space
-
'Man's Best Friend' — and Investment: The Thriving Industry of Pet-Related Franchising