International Payments & Trade Finance

Getting paid is the part of an export deal that decides whether it was worth doing. This course explains every international payment method, from cash in advance to letters of credit under UCP 600, with the risk each one leaves to the seller and the buyer, what it costs and how long it takes. It then covers the tools that protect and finance your receivables: bank guarantees, currency hedging, export credit insurance, factoring and forfaiting.

What you will learn

• Choose the right payment method for each buyer, country and deal size, and justify it with a clear view of the risk on both sides
• Run a documentary collection or a letter of credit from start to finish and know what each bank does under URC 522 and UCP 600
• Prepare documents that comply with a letter of credit and avoid the discrepancies that delay or cancel payment
• Use demand guarantees and standby letters of credit correctly under URDG 758 and ISP98
• Protect your margin against exchange-rate moves and buyer default with forwards, natural hedging and export credit insurance
• Finance your exports before and after shipment with packing credit, discounting, factoring and forfaiting

Course contents

1. International Payment Methods Compared: Seller and Buyer Risk — International payment methods compared: cash in advance, letters of credit, collections, open account. Risk for seller and buyer, costs, timelines and examples.
2. Cash in Advance and Partial Advance Payments in Export — Cash in advance explained: full and partial prepayment, deposits, advance payment guarantees, fraud traps and how to structure a deposit plus balance deal.
3. Open Account Payment Terms: Selling on Credit Safely — Open account in export: when to sell on credit, how to set credit limits and terms, and how to protect yourself with insurance, guarantees and follow-up.
4. Documentary Collection: D/P and D/A Under URC 522 Explained — Documentary collection explained: D/P vs D/A, the URC 522 rules, each bank's role, step-by-step flow, costs, risks for seller and buyer, and a worked example.
5. Letters of Credit Explained: How a Documentary Credit Works — Letter of credit explained under UCP 600: the parties, the step-by-step flow, the 5-banking-day and 21-day rules, costs, and a worked example for exporters.
6. Types of Letters of Credit: Confirmed, Standby, Transferable — The types of letters of credit explained: confirmed, standby (ISP98), transferable, back-to-back, revolving, red clause, sight and deferred, with examples.
7. Letter of Credit Discrepancies: Common Errors and Fixes — Letter of credit discrepancies: the most frequent ones with real examples, what UCP 600 and ISBP 821 say, what a refusal means, and a checklist to avoid them.
8. Bank Guarantees in Trade: Bid, Performance and Advance Payment — Bank guarantees in trade under URDG 758: bid bonds, performance, advance payment and payment guarantees, how calls work, what they cost and how to limit risk.
9. Managing Currency Risk in Export: Invoicing, Forwards, Hedging — How exporters manage currency risk: choosing the invoicing currency, forward contracts with a worked example, options, natural hedging and contract clauses.
10. Export Credit Insurance: How to Protect Your Receivables — Export credit insurance explained: commercial and political risks covered, credit limits, premiums, claims, exclusions, and when Algerian exporters must use it.
11. Trade Finance: Pre-Shipment and Post-Shipment Financing — Trade finance for exporters: packing credit, discounting under LCs and collections, factoring, forfaiting and supply chain finance, with costs and examples.