Export Credit Agencies (ECAs)
Are private or quasi-governmental institutions that act as intermediaries between national governments & exporters to issue export financing, in the form of credits (financial support) or credit insurance and guarantees (pure cover) or both, much like normal banking activitiesletter of credit
* Document issued which usually provides an irrevocable payment undertaking; can be source of payment for a transaction (i.e. redeeming the letter of credit will pay an exporter)
* Parties involved:
+ beneficiary - who is to receive the money
+ issuing bank - of whom the applicant is a client
+ advising bank - of whom the beneficiary is a client
* bill of landing (BOL or B/L) - document issued by carrier to shipper acknowledging that specified goods have been received on board as cargo for conveyance toa named place for delivery to the consignee
factoring
* Financial transaction where by business sells its accounts receivables to a third party (called a factor) at a discount in exchange for immediate money w/which to finance continued business
* Firm based operation (i.e. firm sells all its receivables); vs. forfaiting, which is a transaction based operation
* Parties involved:
+ seller of receivables
+ debtor
+ factor
