Darryl L. DePriest is the seventh presidentially appointed and Senate-confirmed Chief Counsel for the Office of Advocacy.
Prior to joining the Small Business Administration Office of...
United States Small Business Administration
Office of Advocacy
The Costs of Financing Exports for Small Business by McKendrick & Associates
1996. 199 p. McKendrick & Associates, One Brownstone Dr., Horsham, PA 19044 under contract number SBA-8031-OA-93
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.
The complete report is available from:
National Technical Information Service
U.S. Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4639 (TDD)
Order Number: PB96 181300
Cost: A07/$28.00; A02/$14.00 Microf.
*Last Modified 6-11-01