Table of Contents
Large companies and SMEs need to obtain financing for exports and expand into international markets
Imports and exports are as old as civilization itself. One of history’s most famous characters, Marco Polo, was in the business. However, the communications revolution since the 19th century has facilitated exports to the extent the Venetian merchant could never have foreseen. It is, therefore, essential for companies to have an internationalization strategy and a financing platform for exporting. And this is where Inversa Invoice Market comes into play.
Crowdfactoring platforms are set to be key allies in increasing exports for companies in the real economy. Why? They allow them to finance their customers’ invoices abroad.
For example, a canning company from the Rías Baixas or the Bay of Santander can upload an invoice from a canning company based in Germany to a platform such as Inversa. What are the implications of this small revolution? First, companies can be more ambitious in their export bets since, in case they need liquidity, they have at their disposal the possibility of financing the invoices of their foreign customers.
In this article, we will explain why Inversa is a financing platform for exporting that can help companies in the real economy to increase their turnover and, therefore, their profits.
The importance of exports in a global world
The trade balance is one of any country’s most important macroeconomic indicators. On one side of this balance are imported, i.e., goods and services purchased abroad. On the other side are exported, i.e., products sold to customers in other countries.
With the rise of globalization and improved mobility, exports have also become a central issue for all companies. Why?
They allow them to diversify the markets in which they operate, create new lines of business and increase revenues and profits.
Such is the importance of exports that they are at the heart of the founding of the European Union, which began as a common economic market to facilitate exports and imports between member countries.
We live in an increasingly global world, where a product can travel from Valladolid to Sydney in a matter of hours. And where it is possible to sell and install the software in seconds and thousands of kilometers away.
This is why exports are becoming as important as sales in the domestic market.
Moreover, many traditional production sectors, such as the canning, textile and wine industries, are increasingly focusing on the foreign market, distributing their products worldwide.
Digitalization helps real-economy companies to export
Traditionally, it has been considered that exports are only within reach of large companies and multinationals. But this does not correspond to reality.
A large clothing company can have stores worldwide. Still, an SME that designs sustainable clothing can also market it through the digital channel and reach agreements with distributors and chains in different countries.
Thanks to marketplaces, a person living in Tokyo can buy a product made in Seville. Websites, social networks, email, WhatsApp… All these technological advances make it possible for a small company to do business in other countries and continents.
Internationalization is not only available to large companies; SMEs can also implement a strategy to conquer new markets.
To do so, they need more than just quality products or to design a successful commercial strategy. They must also have the financial resources to leap from the national to the international market. Or in other words, they need financing for exports.
The business opportunities of a market of almost 8 billion people
Globalization has allowed any company to open up to a wider market than the local or national one. A market in which 8 billion people and millions of companies are willing to purchase goods and services that meet their needs and demands.
It is clear to no one that the market is becoming increasingly competitive. Just as foreign companies can market their products in our country, companies in the real, local economy can also leap abroad.
If we look at our homes and businesses, we will discover that many of our products and services come from abroad. To be competitive, local companies must also be able to export what they do and take advantage of everything that makes them special compared to others.
SMEs need financing for exports
Every company needs money throughout its life cycle. Whether it is to start a business, meet expenses, make investments or, as in this case, embark on internationalization.
Designing and implementing an international business strategy. Cost of the transportation of goods and products. Investing to increase production… All these issues can be solved with economic resources.
Hence, exporting must be accompanied by an increase in the company’s financing capacity. Therefore, alternative financing is the ideal option to obtain financing for exports and to complement traditional financing channels, such as the financial services of banking institutions.
In addition, through crowdfactoring and crowdlending, it is possible to obtain liquidity in the short term, for example, to face an increase in international demand beyond what is expected. Or to make an investment that will allow the business to grow in other markets. This demonstrates the importance of obtaining financing for exports, both through traditional channels and alternative financing platforms.
From Ferrol to Shanghai. Crowdfactoring to facilitate financing for exports
Inversa Invoice Market, a FinTech born in Ferrol, a small city in the north of Spain, is already helping other companies reach Shanghai, the economic capital of the Asian giant. How does it do it?
Companies can obtain short-term liquidity through our platform to finance their internationalization strategy.
But Inversa’s role goes beyond that. This liquidity can be obtained through the financing of invoices from foreign clients.
For example, if a company in Valencia supplies handmade footwear to a chain of shoe stores in China, it can finance an invoice it has yet to receive to advance payment for the products.
In this way, it can keep its accounts healthy and have working capital to consolidate its position in the Chinese market or export its high-quality products to other countries.
In this sense, Inversa’s marketplace has already financed invoices from companies in our neighboring countries, Portugal and France. But also from other European countries, such as Switzerland or Germany. And even from China. From the Ferrol arsenal to the Great Wall of China.
In short, exporting has always been challenging. Not only because of globalization, digitalization and improving communications and transport. But also because of the emergence of innovative technological and financial projects such as Inversa Invoice Market that help companies obtain financing for exports.