Faculty of Business Environment and Society Coursework

Faculty of Business Environment and Society - Coursework Example The greatest challenge in international trading is the time taken by goods from an exporter to an importer from the time when an order is placed by an importer (Chisholm & Chisholm, 2009). This delays make both parties operates under uncertainties and risks; the risk that they have paid for some goods that may never be delivered or the risk by the exporter that they have shipped goods that they might never receive payments for the same. Trade finance therefore comes in to mitigate those challenges with the risks by ensuring that exporters have enough money or rather capital so as to ensure that there is efficiency in international market place. Financial products imply the various methods that are employed when it comes to international trade transactions. This refer to use of various money management methodologies different investment and banking service to satisfy both the exporter and the importer that they are secure in terms of recovering the money (Chisholm & Chisholm, 2009). These also boost confidence in trade because the exporter can lent more goods to the importer. In executing these strategies both parties are subject to various laws both the port of export and at the destination port. Pre-shipment and post shipment are the two key points in international trading. Post-shipment is a situation whereby the exporter export the goods and after shipping it waits for payment at a later date either immediately after delivery or after sale. Pre-shipment involve exporter entering global market or importer first showing interest in placing an order. The exporter often needs financial assistance in order to extend the same credits to the importers if at all he is to remain competitive like other exporters. At the same time the exporter needs finance to continue its operations in producing more goods for export and that is the reason why he need the payment of goods dispatched as quickly as