How can I get started exporting? How can I get started importing?
	What are the risks in trading internationally?
	How can I reduce and manage my risks in International Trade?
	As an exporter, how can I get paid by a foreign buyer? As an importer, how can I pay my foreign supplier?
	How can I get financing before shipping my goods?
	How can you help my foreign supplier obtain financing?
	I have a foreign buyer that needs to finance the purchase over three years, how can I help get them financing?
	How do I get my goods to my foreign buyer?
	How do I protect my foreign receivables?
	My trading partner deals in a foreign currency, what happens if the exchange rate fluctuates?
	How can I find potential trading partners?
	What is Open Account?
	What is a Documentary Collection?
	What is Advance Payment?
	What is a Letter of Credit?
	As an exporter, can I use a Letter of Credit to get financing?
	If I ask my buyer for a Letter of Credit, how do I receive my payment?
	I’ve received a Letter from my buyer. I have never dealt with a Letter of Credit before, what should I be concerned about? What if I want to change one of the details on the Letter of Credit?
	What is an Irrevocable Confirmed Letter of Credit?
	Why is it necessary to get a Confirmed Letter of Credit?
	How do I get a Confirmed Letter of Credit?
	What are the common terms and conditions of sale and payment?
	What is a Discount?
	What is a Supplier Credit?
	What is a commercial dispute and how can it affect my business?
	What are UCP rules?
	How can UCP rules protect me in the international marketplace?
	Where can I get additional information?

How can I get started exporting? How can I get started importing? Once you know what you want to import or export and have found a supplier or buyer, you need to undertake a purchase and sale agreement with the supplier. We can help guide you through some of the issues you should consider in establishing the agreement.

What are the risks in trading internationally? There are many risks you will face, some of which are; bank insolvencies, your supplier not fulfilling orders, your buyer not paying for shipments, political uncertainty, and currency exchange fluctuations. Everyone has their own risks they face, for an overview of some of these risks contact our Trade Finance office.

How can I reduce and manage my risks in International Trade? Our Trade Finance specialists can provide expertise and products that will help you manage and possibly avoid some of these risks.

As an exporter, how can I get paid by a foreign buyer? As an importer, how can I pay my foreign supplier? There are four common payment methods used to settle transactions: Payment in Advance, also known as Pre-Payment or Cash in Advance – whereby cash is paid up front with a purchase order from a buyer Documentary Credits, also known as Documentary Letters of Credit or Letters of Credit or Commercial Letters of Credit – whereby a bank undertakes a payment obligation of a buyer for its own account on specified conditions. Documentary Collections – whereby a bank, acting only as a seller’s agent, attempts to obtain the proceeds of a sale (in cash or in the form of a formal debt instrument) from a buyer in exchange for shipping documents. Open Account – whereby sellers attempt to collect the payment solely on the basis of their own demand through an invoice.

How can I get financing before shipping my goods? Various programs exist which provide financing to exporters - contact us for more details.

How can you help my foreign supplier obtain financing? In some cases, it is possible to obtain Buyer Credit. Buyer Credit is financial credit granted directly to a foreign buyer by a credit institution in the exporter’s country with the funds to be used for stipulated imports. An example of this is "Buyers’ Term Export Financing" provided through Northstar®†† Trade Finance Inc. This is fixed-rate, medium-term financing to credit worthy foreign buyers of eligible Canadian goods and services for amounts between CAD 100,000 and CAD 3,000,000, and for terms of up to four years.

I have a foreign buyer that needs to finance the purchase over three years, how can I help get them financing? One financing option is as follows; we have an equity interest in Northstar®†† Trade Finance Inc. which provides programs that can help finance your foreign buyers’ purchases from you. If you meet Northstar®††’s requirements for export performance coupled with a credit worthy foreign buyer insurable by the Export Development Canada (EDC), your foreign customer may qualify for financing of between CAD 100,000 and CAD 3,000,000, for terms of up to four years. Foreign buyers must be resident in a member country of the Organization for Economic Cooperation and Development (OECD) or in another country acceptable to Northstar®†† and EDC.

How do I get my goods to my foreign buyer? You ship them by truck, rail, air or boat. To organize shipment, you can enlist the services of a freight forwarder.

How do I protect my foreign receivables? Insurance may be available covering your foreign receivables for up to 90% of their value from either Government Agencies such as EDC or Exim Bank as well as private insurers.

My trading partner deals in a foreign currency, what happens if the exchange rate fluctuates? Depending on the terms of your agreement, the fluctuation could result in a financial loss to you. For example, if you buy an item from a supplier in a country with a currency that is gaining strength, and you agreed to pay in Canadian dollars then it might cost you more to purchase the item. Also, if you sell an item to a country where the currency is weakening and you agree to receive payment in that countries currency then by the time you receive payment it will translate into fewer Canadian dollars. This risk can be managed with some deal structuring and interest rate hedging.

How can I find potential trading partners? There are many resources that will help you find potential suppliers or customers. Trade shows are also a big source of companies looking to deal internationally. Each industry segment has their own trade activities – locate your industry association and ask for details. The internet has made it possible to tap into web-sites of trade associations and trading companies around the world. Type in "International Trade Opportunities" into your web browser for a list of these sites. In addition, provincial and federal governments will also help locate trading partners through various programs. An example of this is the Team Canada Trade Missions which take Canadian business people in large groups to various countries.

What is Open Account? A form of payment whereby a seller attempts to collect payment solely on the basis of their own demand through an invoice.

What is a Documentary Collection? A form of payment whereby a bank, acting only as a seller’s agent, attempts to obtain the proceeds of a sale (in cash or in the form of a formal debt instrument) from a buyer in exchange for shipping documents.

What is Advance Payment? Advance Payment, also known as Pre-Payment or Cash in Advance, is a form of payment whereby cash is paid up front with a purchase order from a buyer.

What is a Letter of Credit? A Letter of Credit is a form of payment whereby a bank undertakes a payment obligation on behalf of a buyer for its own account on specified conditions.

As an exporter, can I use a Letter of Credit to get financing? Yes – a Letter of Credit can improve your chances to obtain financing.

If I ask my buyer for a Letter of Credit, how do I receive my payment? When you present documents under the letter of credit to your negotiating bank you will begin the payment process. If your documents are in order, they will be accepted and forwarded to the issuing bank. In turn, the issuing bank will then debit the buyer’s account and forward the funds to the reimbursing bank who then will pay you.

I’ve received a Letter from my buyer. I have never dealt with a Letter of Credit before, what should I be concerned about? What if I want to change one of the details on the Letter of Credit? Contact an individual at our offices for your Trade Finance questions.

What is an Irrevocable Confirmed Letter of Credit? It is a Letter of Credit where a bank in the exporter’s locality, usually the advising bank, undertakes to back up the credit standing of the issuing bank with its own commitment to pay.

Why is it necessary to get a Confirmed Letter of Credit? Exporters will find this valuable when they have little confidence in, or do not know the financial strength of the foreign opening bank or the economic and political situation of the country of import.

How do I get a Confirmed Letter of Credit? To get a Letter of Credit Confirmation, exporters must specify that the documentary credit be confirmed by a first class bank acceptable to the exporter. The buyer will then instruct his bank to request the advising bank, which exporters can specify, to add its confirmation.

What are the common terms and conditions of sale and payment? These are the terms provided in the Sales Contract between buyer and seller stipulating the obligations of each party. Commonly referred to as the "underlying contract", there are three components with which your banker will have some familiarity: Payment Mechanism – referring to which payment alternative will be used; Terms of Delivery – the manner in which goods are to be delivered and site of title transfer; Documents – which are extremely important in international trade and can be classified into five groups: Transport – bill of lading (marine), air waybills, cargo receipts, combined transport document/multimodal transport document, forwarding agent’s certificate, parcel post receipt, etc. Commercial – commercial invoice, packing list, inspection certificate, weigh note, certificate of analysis, certificate of weight, etc. Official – consular invoice, customs invoice, certificate of origin, health certificate, export licence, etc. Financial – draft or promissory notes which may have further financial use (see "Financing"). Insurance – insurance certificates/insurance policy.

What is a Discount? A Discount can mean one of two things: 1) usually a percentage deducted from the invoice price to encourage payment of an invoice before maturity, or 2) a sum deductible from the face value of drafts and similar negotiable instrument as a charge made by the bank or financing company for making the value of the draft available before maturity.

What is a Supplier Credit? Financial credit provided by a seller to a buyer of goods or services, in exchange for the buyer’s implicit or explicit promise to pay for the amount due at some future date.

What is a commercial dispute and how can it affect my business? A commercial dispute occurs when one of the parties in a transaction refuses to perform in accordance with the terms of a contract. It can be quite damaging to your company as payments for your shipped goods can be withheld or delayed thereby affecting your cash flows.

What are UCP rules? The Uniform Customs and Practice for Documentary Credits (UCP) is the universally recognized set of rules governing Documentary Letters of Credit. The rules were first published by the International Chamber of Commerce (ICC) in 1933, and the latest revision - Publication UCP 600 - were implement July 1st, 2007. They provide a comprehensive and practical working aid to bankers, lawyers, importers, exporters, transport executives and others involved in international trade. Our Documentary Letters of Credit are issued subject to the UCP.

How can UCP rules protect me in the international marketplace? Although the Uniform Customs and Practice (UCP) for Documentary Credits does not have the force of law, it does have the practically universal support of banks as well as the courts of many countries. By using UCP rules, buyers and sellers have a better understanding of the rules they are agreeing to.

Where can I get additional information? Contact our Trade Finance Department. Other information sources are: Re.Export InfoCentre – The Department of Foreign Affairs and International Trade Export Information Web-site: http://www.infoexport.gc.ca/ Infoservice Bulletin Board at (613) 944-1581 or 1-800-628-1581