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Chapter 19
Financing International Trade
Lecture Outline
Payment Methods for International Trade
Prepayment
Letters of Credit
Drafts
Consignment
Open Account
Impact of the Credit Crisis on Payment Methods
Trade Finance Methods
Accounts Receivable Financing
Factoring
Letters of Credit
Banker’s Acceptances
Medium-Term Capital Goods Financing (Forfaiting)
Countertrade
Agencies that Motivate International Trade
Export-Import Bank of the U.S.
Private Export Funding Corporation (PEFCO)
Overseas Private Investment Corporation (OPIC)
Chapter Theme
This chapter first suggests why international trade can be difficult. Then, it explains the various ways in
which banking institutions can facilitate international trade by resolving problems faced by the exporter
and importer.
