This Bachelor thesis is aimed at all exporters who are interested in doing business with Belarus and who want to inform themselves about the coverage of del credere risks and export financing because export financing is nowadays expected as part of the offer. Consequently, the aim of this work is to examine the instruments of short-term export financing and the forms of medium-term financing, taking into account the risk hedging costs for decision-making in export business with Belarus. The risks are covered by export credit guarantees issued by the Federal Republic of Germany. Export financing is provided through supplier credits for the purposes of competitive differentiation. All instruments examined were used to refinance supplier credits. Such decision methods as cost comparison and SWOT analysis are used to determine the appropriate instrument. After the SWOT analysis, risks, opportunities and such important criteria as security, liquidity inflow, creditworthiness requirements and administrative expenses are assessed. The use of the SWOT analysis reduces the probability of a risk or opportunity miscalculation and thus of a wrong decision.
Table of Contents
1 Introductory remarks
1.1 Initial situation and problems
1.2 Goal of the work and personal motivation
1.3 Delimitation of the topic
1.4 Procedure
2 Theoretical basics
2.1 Methodology of work
2.2 Definition of important terms
2.3 Euromarket financing
2.4 Acceptance credit
2.5 Export factoring
2.6 Forfaiting
3 State export credit insurance
3.1 OECD and Berne Union regulations
3.2 Forms of coverage by the waistband
3.2.1 Supplier credit cover
3.2.2 Manufacturing risk cover
4 Short-term financing. cost comparison
4.1 General starting position
4.2 Costs of the Hermes cover
4.3 Overdraft costs
4.4 Acceptance credit costs
4.5 Costs of export factoring
4.6 Comparison of costs
5 Short-term financing. SWOT analysis
5.1 Overdraft facility
5.2 Acceptance credit
5.3 Export factoring
5.4 Comparison of the results of the SWOT analysis
6 Medium-term financing. cost comparison
6.1 General starting position
6.2 Hermes coverage costs
6.3 Equity financing
6.4 Debt financing
6.5 Forfaiting
6.6 Comparison of costs
7 Medium-term financing. SWOT analysis
7.1 Equity financing
7.2 Debt financing
7.3 Forfaiting
7.4 Comparison of the results of the SWOT analysis
8 Summary
Thesis Objectives and Key Topics
The objective of this thesis is to examine instruments for short-term and medium-term export financing, specifically focusing on business transactions with Belarus. The study aims to determine the most appropriate financing instruments by evaluating risk protection costs, utilizing cost comparison methods, and applying SWOT analysis to assess the suitability and impact of different financing alternatives.
- Instruments of short-term export financing (Overdraft, Acceptance credit, Factoring).
- Forms of medium-term export financing (Equity financing, Debt financing, Forfaiting).
- Analysis of political and economic del credere risks in exports to Belarus.
- Utilization of the Hermes cover for risk hedging in international trade.
- Strategic decision-making processes for exporters regarding financial and credit risks.
Excerpt from the Book
2.5 Export factoring
Export factoring means the ongoing sale of short-term receivables from export transactions to a specialized financial institution. Short-term here means a term of up to 180 days. The contractual assignment of a claim from a creditor to a factoring provider is called assignment.
The factoring company places certain requirements on exporters in order to avoid the purchase of "bad risks". Only export receivables with a certain minimum volume per order are purchased. The annual turnover of the connection customers must also reach a certain level in order to conclude a contract with the factoring company. The claims must be free of rights of third parties, the amount of which must be fixed and best derive from transactions with regular customers. This minimizes the audit costs of the debtors and the total export factoring costs.
There are different forms of export factoring. Depending on whether the importer is informed about factoring and the associated assignment or not, a distinction is made between open and silent factoring. With genuine factoring, the factor is liable for the risks and receivables assumed without recourse. The exporter is liable only for the legal status of the claim. Genuine export factoring fulfils financing, service and credit protection functions. The financing function consists in the fact that the factor buys the current receivable and prepays the exporter 70 - 90 % of the amount of the receivable less factoring costs. The factoring company pays the exporter the blocking amount of 10 - 20 % only after payment by the importer or after a certain blocking period.
Summary of Chapters
1 Introductory remarks: Provides an overview of the current situation for German exports to Belarus and outlines the goals and procedure of this thesis.
2 Theoretical basics: Defines essential financial terms and explains the methodologies used for analysis, including the SWOT method and cost comparisons.
3 State export credit insurance: Details the functionality of the Hermes cover and the regulations set by international bodies like the OECD and the Berne Union.
4 Short-term financing. cost comparison: Performs a quantitative comparison of costs for different short-term instruments in a specific export scenario.
5 Short-term financing. SWOT analysis: Evaluates the strengths, weaknesses, opportunities, and risks associated with each short-term financing instrument.
6 Medium-term financing. cost comparison: Examines and compares the financial costs of medium-term supplier credit options, including equity and debt financing.
7 Medium-term financing. SWOT analysis: Assesses the strategic implications of medium-term financing choices using the SWOT framework.
8 Summary: Concludes the thesis by summarizing findings on risk coverage, cost-efficiency, and strategic decision-making in export business.
Keywords
Export financing, Belarus, supplier credit, Hermes cover, del credere risks, SWOT analysis, short-term financing, medium-term financing, forfaiting, factoring, overdraft facility, cost comparison, risk hedging, export credit insurance, international trade.
Frequently Asked Questions
What is the primary focus of this thesis?
The work primarily focuses on identifying and analyzing the most effective financing and risk-hedging instruments for German companies exporting to Belarus, specifically considering political and economic risks.
What are the main thematic areas covered?
The thesis covers short-term instruments like overdrafts and factoring, medium-term forms such as equity and debt financing, and the role of state export credit insurance (Hermes cover).
What is the central research question?
The study addresses two main questions: how German exporters can avoid del credere risks, and what specific opportunities and risks are associated with different financing instruments.
Which scientific methods are employed?
The author uses cost comparison analysis for financial feasibility and SWOT analysis to evaluate the strategic strengths, weaknesses, opportunities, and risks of the chosen instruments.
What does the main body of the work examine?
The main body systematically analyzes the costs and SWOT profiles of various short-term and medium-term financing forms, providing calculations and comparative matrices for decision support.
Which keywords best characterize this work?
Key concepts include Export financing, Hermes cover, del credere risks, SWOT analysis, Forfaiting, and Factoring.
Why is the choice of financing instrument critical for Belarus exports?
Due to the specific economic and political instability in Belarus, selecting an instrument that balances risk protection with cost-efficiency is essential for maintaining liquidity and competitiveness.
How does the author evaluate the "Acceptance Credit"?
While the author identifies the acceptance credit as one of the most cost-effective options, they also note that it requires high creditworthiness from the importer and is becoming less flexible due to strict regulations.
What conclusion does the author reach regarding Forfaiting?
Forfaiting is identified as a secure, yet more expensive alternative suitable for medium-to-long term receivables, especially when credit insurance is not available.
- Citar trabajo
- Valentina Barysava (Autor), 2017, Analysis of short-term instruments of export financing as well as the various forms of financing via supplier credits for medium-term export financing, taking into account the risk protection costs, Múnich, GRIN Verlag, https://www.grin.com/document/461903
