By Carla Winfield, Senior Trade Finance Advisor at Silicon Valley Bank
U.S. companies are increasingly looking to foreign markets for new sales opportunities, which can be challenging but rewarding if you are properly prepared for the risks involved. Understanding the risks associated with entering new markets and gaining the knowledge necessary to mitigate those risks can help you grow your business successfully overseas.
International Risk Factors
When negotiating the terms of a sales contract, it is vital to be aware of the international risk factors that may interfere with a foreign buyer's ability to pay its invoices. Once the international risk factors are assessed, it is important to determine how payment will be made under the sales agreement. The method of payment negotiated under the sales contract will indicate the degree of commercial or political risk exposure associated with the transaction. There are several questions that need to be answered before agreeing on a method of payment:
Types of Risk
Want to learn more about what types of risk exist in and how to avoid them? Read the original post on SVB's blog.