Innovative Trade Financing Expands U.S. Pool of Lenders and Market for Machinery Export - Internet-based payment systems, credit finance and supply chain trade finance replacing letters of credit as currency of exchange

摘要

Innovation did not usually come to mind, over the years, when talk turned to trade finance. It was a venerable, mostly unchanging, part of global commerce, with a centerpiece product, the letter of credit, that had origins in the European Renaissance. Its practice produced a mountain of paperwork, and its practitioners were sometimes called "guys with green eyeshades." But, obviously, times have changed. The field is being swiftly reshaped in multiple ways. The letter of credit's market share is sinking, replaced by Internet-based payments systems, credit insurance, and the ability of global banks to finance and remove risk for exporters and importers in the same transactions. Two recent trends within this mini-flood of change are worth noting. One is the growing roster of lenders helping small and mid-sized American exporters of machinery and equipment to close their deals. A few are banks, others are finance companies, and, since 2004, they have become prominent participants in Export-Import Bank guarantee and insurance programs.