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Get Paid

Exporters usually get paid through banks in the importing and exporting countries. Exporting Basics and other export guides describe the various payment options and pros and cons of each. From least to greatest risk, payment methods include cash in advance (wire transfer credit card), Letter of Credit (L/C), Documentary Draft (sight, time and date drafts), open account, and consignment.

To some extent, you are always at risk at payment time, even with domestic sales. It's important, therefore, to check out the buyer. The payment terms should be more demanding for less-known buyers. Letters of Credit (L/Cs) or documentary drafts (sight or time) are more common export payment methods. They provide reasonable security for you and some latitude for the buyer on when to pay. L/Cs are the most secure after cash in advance. You are virtually assured of payment when the buyer receives the goods. However, many importers prefer still more time to pay. Because buyers can often get better terms from your competitors, L/Cs are not always an option. Thus, documentary drafts (payment after a specified time period) are frequently used. If you need to use open account to be more competitive, you can still be assured of payment with an export credit insurance policy from governmental or other export credit insurance programs (e.g., the US Export-Import Bank’s Small Business Export Insurance Policy and Coface @Rating Export Insurance). Exporters might also consider factoring or forfaiting (discounting the receivable) as ways to get paid up front while still offering competitive credit terms to buyers.

For more information on payment methods, see Guide to the Finance of International Trade and Bankable Deals: a Small Business Guide to Trade Finance For trade finance programs and services, see:

  • Export Finance Matchmaker
  • Export-Import Bank Programs & Information
  • EX-IM Bank Small Business Services
  • Ex-IM Export Credit Insurance Program
  • SBA News and Loan Programs
  • SBA Export Express -- Loan Program for Small Business Exporters
  • Export Working Capital Loans
  • Small Business Export Insurance Policy
  • US Sources of Trade Finance
  • Banks of the World
  • International Commercial Banks of the USA
  • Official Export Credit Insurance Agencies (OECD countries)

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