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Лекции по английскому языку для изучающих банковское и финансовое дело - файл ENGLISH for BANKING.doc


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Parti


TEXT

Read Иге text below concentrating on its contents and ter­minology:

However skilled a company is at selling goods overseas and whatever its size, exporting can, because of delays in receiv­ing payment, seriously deplete cash flow and to that extent reduce profitability, unless the exporter arranges special fi­nance.

An exporter often has to allow credit terms to an overseas buyer, to cover the time not only needed to transport the goods, but also the period of production, sometimes of years in the case of large-scale projects or heavy machinery ex­ports. In addition, there can be delay between payment by an overseas buyer and the actual receipt of funds by an ex­porter.

Types of finance. There are two types of export credit. Under supplier credit an exporter allows credit terms to an

175

^ Active Vocabulary:

deplete

allow credit with/without recourse

overdraft

overdrawing advance

face value of the bill clean bill

bill negotiation

cash against documents

charging interests collection fees

Accepting Houses Committee

bank bill . с

discount

174


  • исчерпывать,
    истощать

  • предоставлять кредит

  • с/без права обратного
    требования

  • овердрафт, превышение
    кредитного лимита

  • превышение

-1) аванс, авансирование 2) заем, ссуда

  • номинал векселя

  • недокументированный ве­
    ксель

  • передача векселя

  • платеж наличными
    против документов

  • взимание процентов
    сбор за инкассирование

  • Комитет акцептных домов

(Великобритания)

  • банкнота, банковский
    билет

  • 1) дисконт, учет векселей
    2) процент скидки; ставка
    учета

money market

sale proceeds acceptance commission

factoring

sales accounting collect debts

service charge standing of a company

— 1) денежный рынок

2) рынок краткосрочного капитала

  • поступления от продажи

  • акцептный комиссионный
    сбор

  • факторинг,
    факторинговые операции

  • торговая бухгалтерия

  • получать деньги в
    погашение долга;
    инкассировать долг




  • плата за услуги

  • финансовое положение,
    репутация компании

overseas buyer in the sales contract and then obtains finance to cover these terms from a UK bank. With buyer credit a UK bank provides finance direct to an overseas buy«r, or an approved borrower, so that an exporter can be paid immedi­ately on shipment of the goods. If the finance is with recourse, it means that an exporter is liable for any balance of funds the buyer does not repay to the lender. If the finance is with­out recourse, an exporter is not responsible to a lender for any default by a buyer.

^ Short-term finance. The first obvious method of financing export sales is through an exporting company's existing over­draft facility with its bank. It is clearly very simple and con­venient to finance all the elements of the export contract (pur­chasing, manufacturing, shipping and credit) by simply over­drawing within the facility and replenishing the account with payments received from an overseas buyer.

As business increases it is unlikely that an exporter can finance sales entirely from an overdraft, palricularly as bor­rowing in this way may be more expensive than other forms specifically designed for export credit.

^ Advance against bills. One form of short-term finance for the exporter is to obtain an advance of funds from a UK bank against the face value of a bill of exchange drawn by an ex­porter on an overseas buyer under the terms of the export t contract. The exporter sends the bill to the bank which ad- [ vances an agreed percentage of tfie value to the exporter immediately and undertakes to present it to the overseas buyer for collection. If the buyer does not pay the UK bank for the bill then the bank has recourse to the exporter for the loss.

An advance against a bill is made only when unaccompa­nied by arfy transport documents relating to the exported goods i.e. it is a clean bill collection. The bank charges inter­est for the credit period of the loan and fees for the collection operation.

176

^ Negotiation of bills. Obtaining an advance against bills is useful only when a limited amount of extra finance is re­quired, the rest being covered by existing resources. If an exporter requires more finance in the short-term, an alter­native method is to establish a facility for bill negotiation. The exporter's bank agrees to purchase bills (usually ac­companied by the shipping documents) on presentation. The hank may even simply purchase the documents under a cash against documents collection. The bank then sends the bills for collection to the overseas buyer and reimburses itself when the buyer pays. If the buyer .defaults, the bank has recourse to the exporter, charging interest for the credit pe­riod any collection fees. A cheaper rate of interest is avail­able to exporters holding ECGD1 insurance, and normally the exporter assigns the ECGD policy over to the bank as security.

Acceptance credits. There are various merchant banks, members of the Accepting Houses Committee, which accept a bill of exchange drawn by an exporter on any of its mem­bers. This bank bill, as it is called, can be discounted (i.e. sold for its face value less a discount charge) in the money market to one of the discount houses that specialise in this business.

The sale proceeds are credited to the exporter and when the bill matures, the bank pays it and debits the exporter's account for the amount plus an acceptance commission. Al­ternatively the exporter can draw another bill on the bank to be accepted and simply pay the difference between the face value of the maturing bill and the sale proceeds of the new one. A company can choose when to draw funds by gauging when there is the best discount rale in the money market, instead of being tied to overdraft rales of interest with a bank. Normally only the larger cxporler uses Ihis service.

^ Documentary acceptance credits. With a confirmed irre­vocable letler of credit an exporter can receive finance im-

ECGD — Export Credit Guarantee Department.

177

mediately on presenting to the UK confirming bank a bill of exchange and the documents required under the terms of the credit. The bank can accept a term bill for extended pe­riods which the exporter can then discount with any bank for cash. Any cost is charged to the exporter unless it has been arranged for the overseas buyer to bear costs.

Factoring. If export turnover is sufficiently large, an ex­porter may find it easier to shift the problems of collecting the payment for completed orders over to organisations that specialise in the task of debt collection and trade finance.

An exporter can sell trade debts to a factoring company, usually a subsidiary of a major clearing bank. In return the exporter receives up to 80 per cent of the face value of the debts. The factoring company handles the sales accounting and carries out the task of collecting the debts from overseas buyers. The factoring company regularly monitors sales led­gers for the exporter. When the factoring company receives payment it credits the exporter with the 20 percent balance, deducting an amount for service charges. If the overseas buyer defaults on a debt, there is no recourse to the exporter. The factoring company still pays the remaining 20 per cent, less charges, on the due date. Because of this a factoring company makes an agreement with an exporting company only after examining closely the standing of the company and the reliability of an overseas buyer, and indeed of the buyer's country.

178


A factoring company may be prepared to buy the goods destined for an overseas buyer for cash. The exporter then acts as the factor's agent, delivering the goods and collecting the proceeds. If the buyer does not know that the exporter has raised finance through a factoring house to export the goods, fit is called undisclosed factoring. The exporter still deals directly with the buyer for payment of debts.

Comprehension. Answer the following questions: 1 Why does the exporter have to arrange special finance for his exports?

  1. List two types of export credit.

  2. What is the difference between the supplier credit and
    the buyer credit?

  3. What does finance with recourse mean?

  4. What is the simplest method of financing export sales?

  5. What are the disadvantages of financing export sales by
    an overdraft?

  6. What must the exporter do to obtain an advance on funds

for his exports from his bank?

  1. What does the bank do if the buyer does not pay a bill?

  2. On what type/kind of bills is an advance granted?




  1. What can the exporter do if he needs more finance than
    just an advance against bills?

  2. What does the bank do with the purchased bill?

12. Why is it a good thing for the British exporter to be a
holder of EGGD insurance? i , •

  1. What does it mean to discount the bill?

  2. In what case can the exporter receive finance on his ex­
    port sales from the bank?




  1. Who bears the costs of discounting bills?

  2. Which organization in the UK specializes in collecting
    payment for completed orders?

  3. What is the job of a factoring company?

18. Does the factoring company have recourse to the exporter
if the buyer defaults?

  1. How does the factoring company secure its interests?

  2. When does the exporter act as the factor's agent?

  3. What is undisclosed factoring?

179




II

Comprehension. Complete the following on the basis of the text:

  1. Supplier credit is a facility set up to enable

  2. Until a bill is accepted by the buyer, the bank advance is
    on

  3. An overdraft facility is often used by to

  4. To obtain advance of funds from the bank, the exporter
    has to for

  5. Fees are by for

  6. Interest is for of

  7. When the bank undertakes to negotiate the bill on behall

of the exporter, it with recourse to the exporter in

case

  1. If exports are covered by a ECGD guarantee

  2. To avoid being out of funds while awaiting settlement al
    maturity, the exporter can to


12. If unfortunately the foreign buyer has become insolvent,
the loss


Arrange your knowledge of financial terminology by group ing the terms required under appropriate headings:

  1. Advantages of the supplier's credit over the buyer's credit.

  2. Names of contracts and agreements to be concluded
    (signed) under these forms of credit.



  1. Gerferal characteristics of these documents.

  2. Two forms of a line of credit arrangement.

  3. The main lines of the activities of the Midland Bank Group-

180


  1. Factoring is a service used by the exporter who passes
    the task of to

  2. Before the start of the factoring operation, the factor will

I

IV

You are given below a list of financial one-word-terms, list all terms-phrases you can associate with them: 1. Credit 2. Interest 3. Rate 4. Bond 5. Purchase 6. Leasing 8. Payment 9. Overdraft 10. Forfeit 11. Discount 12. Collec­tion

Make sentences with these terms.

Test. Fill in the missing words: .

A conventional overdraft facility is often used by exporters

to transactions where credit terms extend over a

period and is commonly used during and for the period

prior to of the goods.

It is sometimes possible for advances of an agreed percent­
age to be made against the value of a bill of exchange

by an exporter on an overseas buyer entrusted to the

bank for

In approved cases banks will negotiate foreign on

behalf of their customers for amounts up to pre-agreed lim­
its. The bank in effect the bill for the face amount with

recourse to the in the event of non-payment. When the

bill is paid the resultant proceeds are used to repay the

made when the bill was purchased, the exporter paying

fees and for the credit period.

Factoring is a service being used more and more by

who need, through the growing level of competition in

trade, to extend open credit to foreign customers with

resulting problems such as: How much should be given ?

On what ? What are the risks? How should the

exporter go about payment given the differences in lan­
guages, law and practice?

181

I

Unit Six

Short-term Export Finance

Part II

Active Vocabulary:

confirming house

place an order export finance house

credit assessment export house reimburse promissory note

premium recourse

counter claim warranty sight bill

конфирмационный дом

(Великобритания)

размещать заказ

фирма экспортного

финансирования

оценка кредита

экспортная фирма

погашать

простой вексель, долговое

обязательство

  1. премия, надбавка

  2. премия по срочным сделкам
    регресс, право регресса,
    право оборота

встречный иск гарантия, поручительство предъявительский вексель

^ TEXT

Read the text below concentrating on its contents and ter-minology:

Confirming house. A confirming house is effectively an agent for an overseas buyer. The confirming house, acting for a buyer, places an order with an exporter and deals di-

rectly with the exporter to complete the contract. In this vvay there is no overseas credit risk or financial burden for the exporter, because the confirming house gives short-term credit to the overseas buyer who pays a commission for the services provided. A specialised form of confirming house is a buying house which makes purchases in the UK for over­seas department stores.

^ Export finance house. If an exporting company sells only occasional large value capital or semi-capital goods abroad it may be better for it to use an export finance house to handle an overseas contract. An export finance house is particularly useful in coordinating finance when an overseas buyer is sup­plied by several companies, none of which wishes to take the major responsibility for arranging the finance for the con­tract. The export finance house provides cash to the exporter on shipment and credit to a buyer. It handles the credit as­sessment of a buyer, takes out*any necessary insurance, and if a buyer defaults there is no recourse to the exporter. The export finance house is able to take the risk of providing and managing export credit in foreign currencies, relieving its UK customer of these burdens.

Export houses. Export orders are not directly financed by export houses. They buy products from an exporter, acting either as an export merchant, i.e. buying and selling goods overseas, or as an export agent where an exporter receives payment for goods upon shipment and the export agent pro­vides credit to the overseas buyer, promotes the goods abroad, holds stocks in the UK, and even acts as an export sales department.

^ Short-term ECGD-backed finance. In addition to those sources of short-term finance already mentioned, the UK government's Export Credits Guarantee Department (ECGD) guarantees finance for exports for periods normally UP to two years.

ECGD does not itself credit to the exporter because it is an insurance agency. But it provides a guarantee to the

183

exporter's bank to reimburse it if any overseas buyer de­faults on payment. With this guarantee the bank can finance the exporter's business at preferential rates of interest.

There are two ECGD bank guarantees for short-term ex­port finance: one covering business where the method of pay­ments is bills of exchange or promissory notes (the Bills or Notes Scheme); and the other for business transacted on open account terms (the Open Account Scheme). The exporter decides how much finance is likely to be required at any one time and applies to ECGD for a guarantee to be given to a bank for this amount. When ECGD has indicated its willingness to issue a guarantee for this amount, the bank issues to the ex­porter a facility letter which outlines the terms and conditions under which finance is available. The facility is on a "revolv­ing credit" basis and is renewable annually. ECGD charges the exporter a premium for the bank guarantee.

Before agreeing to provide a bank guarantee, ECGD re­quires an exporter to sign a recourse agreement which en­sures that ECGD can turn to the exporter for payment if it has to pay sums to the exporter's bank under the guarantee The exporter then makes a counter claim on ECGD under the comprehensive short-term insurance already obtained

^ Bills or notes scheme. The bills or notes guarantee covers finance for contracts with credit terms of less than two years. Normally an exporter must have held an ECGD comprehen­sive insurance policy for an acceptable period, which could be as much as 12 months.

The exporter presents a bill of exchange to the bank to­gether with documentary evidence that the goods have been exported from the UK and a warranty which confirms that the exporter has complied with the basic ECGD insurance cover. The bank then makes an advance of 100 per cent of the farfe value of the bill or note, excluding any interest ele­ment.

Until the bill is accepted by the overseas buyer, the bank has recourse to the exporter. After it is accepted the bank

has recourse to ECGD and not to the exporter. Sight hills are always with recourse while promissory notes are not. The bank deducts a small fee per item at the time of the ad­vance, takes its normal commission for collecting the bills or notes, and charges interest at a margin above its base rate on a day basis. On receiving the proceeds of the collection the bank reimburses itself for the advance made to the exporter. Open account scheme. The bank advances funds to the exporter up to the total value of the invoice against a promis­sory note issued in favour of the bank, assuming the note docs not go over a credit limit agreed when the facility was established. If the overseas buyer defaults and the exporter cannot honour the promissory note, the bank claims from ECGD, which in turn has recourse to the exporter. Funds can be advanced for up to six months from date of shipment to the overseas buyer.

I Comprehension. Answer the following questions:

1. What part does a confirming house play in export/import

trade?

  1. In what sort of transactions arc the services of an export
    finance house particularly useful?

  2. List the services provided by an export finance house in
    handling an overseas contract.

  3. What two functions do export houses perform?

  4. How docs an export merchant differ from an export agent?

  5. What does ECGD provide to British exporters?

  6. Why doesn't ECGD provide credit to the exporter?

  7. What two types of bank guarantees does ECGD issue?

  8. Why docs ECGD require an exporter to sign a recourse
    agreement?

10. When can an exporter apply for the bills and notes guar­
antee?





185

184

  1. What procedure should the exporter follow in this case?

  2. What interest does the bank charge for making an ad­
    vance?

  3. In what case does the bank advance funds to the exporter
    up to the total value of the invoice?

  4. Who pays for goods if the overseas buyer defaults?

II

Comprehension. Complete the following on the basis of the information given in the text:

1. By using the services of a confirming house the exporter

avoids overseas credit risk or financial burden because it
is which gives to

  1. The export finance house is able to relieve its UK cus­
    tomer of the risk of

  2. The job of an export agent is firstly to , secondly to

, thirdly to and to

4. As ECGD is an insurance company, it doesn't but it

  1. A facility letter is issued by after ECGD has agreed to

  2. A facility letter states all the

  3. The exporter pays ECGD for issuing

  4. In case of bills or notes guarantees the bank can turn to the
    exporter for payment until

  5. After the bill is accepted by the overseas buyer the bank
    can turn payment only to which

10. When the bank makes an advance it charges and

then it and

•11. If the overseas buyer defaults, the bank which

Ill

The two texts on short term export finance provided you with a set of specialized terms. It is time now to arrange them in groups describing definite financial operations. You '.

^ 186

wiU see that terms of more general character often have their synonym (e.g. profit, gain, proceeds) while the very spe­cific ones (e.g. types of bills or export finance houses) have, as a rule, only one name. This results in a great precision of information passed, and you can never be too precise where money is concerned.

By filling in the table below arrange the. knowledge on the terminology of finance you have already acquired:

Terms related

The main term

Its synonyms (if any)

  1. Accept
    (noun and verb)

  2. Advance
    (noun and verb)

  3. Bill

  4. Cash

  5. Collection

  6. Discount
    (noun and verb)

  7. House

  8. Overdraft

  9. Premium

10. Proceeds

Having filled in the, table above, use the terms you have just listed in sentences of your own.

IV

Complete the following:

  1. The exporter applies to for

  2. When the exporter has filled in he




  1. The UK bank sends

  2. Simultaneously ECGD and informs

187

  1. When the UK bank has received it

  2. When the exporter receives the ECGD offer he

  3. The exporter signs a

  4. ECGD extends a




  1. When the goods the exporter

  2. On receipt of shipping documents, the bank

  3. The bank forwards

  4. When the bills are presented to the foreign buyer, he

Unit Seven

Medium Term Export Finance

Parti


Test. Fill in the missing words:

There are many companies who wish to export and are

asked to credit terms to the prospective buyer who do

not wish to be concerned with the and administrative

burdens involved and this function can be readily under­
taken by the export house. The simple effect of such

"handing over" of the administration can overcome flow

problems as the export finance is able to arrange for

cash to be made upon

An finance house is well suited to undertake business

involving more than one UK supplier, particularly when one

does not wish to be responsible for committing its own

for the benefit of sub-contractors or partners in a joint

The export finance house in these circumstances can

finance in the UK in relation to the customer's require­
ments.

^ Active Vocabulary:

leasing hire purchase instalment merchant bank down payment

equity

fixed-rate —

bond —

floating-rate note —

interest rate —

trustee —

forfeiting service —

aval —

commitment fee —

eligible —

лизинг

покупка с оплатой в рассрочку взнос при уплате частями торговый банк

первоначальный взнос; первый взнос при покупке

  1. маржа

  2. доля акционера

3) обыкновенная акция

с фиксированной процентной

ставкой

1) облигация

2)закладная

  1. долговая расписка

  2. ручательство, гарантия
    краткосрочное долговое
    обязательство с плавающей
    процентной ставкой
    процентная ставка
    доверитель, опекун
    финансирование торговли путем
    учета векселей без права регресса
    авал (поручительская надпись на
    векселе)

комиссионные за неиспользо­ванную часть кредита приемлемый

189

^ TEXT

Read the text below concentrating on its contents and ter­minology:

Medium-terra finance. An exporting company may find with some contracts that it needs credit for periods longer than two years, which is normally the limit for financing ex­ports by methods so far described. Where credit is required for more than two years, there are other options, the most important of which are described below.

Leasing. Where there is a large item of capital equipment involved, an exporter may find it more beneficial to sell the product to a leasing company which then provides it to the overseas buyer on a lease agreement. The exporter receives immediate payment from the leasing company without fur­ther recourse.

Instalment finance. An exporting company can also finance its export order by arranging hire purchase for an overseas buyer, either through a finance house in the buyer's country or through a UK finance company purchasing the goods from the exporter outright and receiving instalments from the buyer through an overseas finance company.

^ Merchant banks. Merchant banks have traditionally specialised in arranging medium and long-term export fi­nance. In additon by using their associates and other close banking connections abroad, they are able to advise on and arrange finance for the exports of other industrialised coun­tries under their own national schemes.

Merchant banks can also arrange Eurocurrency loans of all types. Eurocurrency loans are often required to cover the front-enfl finance, i.e. normally the financing of down pay­ments by buyers for large projects abroad. For certain projects it is sometimes possible to arrange other types of finance e.g. equity participations, co-financing loans from

international development agencies or aid funds. In suitable cases arrangements can be made for medium-term, fixed-rate finance in the Eurobond markets by way of private place­ments or public offerings of bonds to finance major overseas projects. Alternatively it is sometimes possible to issue float­ing-rate notes which provide medium-term finance at float­ing interest rates but subject to a minimum fixed rate.

All or some of these elements can be combined to give a complete package which can provide up to 100 per cent of the financing of acceptable projects.

Security for the finance normally involves government, bank or other first class guarantees. However, in appropri­ate cases it is possible to secure the loan and to service the debt from future project income. A merchant bank can acl as agent or trustee for all the lenders in a particular package. In this way it becomes the sole point of contact between bor­rowers and lenders throughout the life of the credit facilities provided.

Forfeiting. Some UK banks oiler a forfeiting service to com­panies exporting capital goods and requiring credit for peri­ods up to seven years. With forfeiting, the bank purchases from an exporter bills of exchange or promissory notes signed by an overseas buyer at a certain discount.

If a buyer has arranged an aval, i.e. unconditional guaran­tee for each bill or note from an internationally recognised major bank, then the exporter can receive finance from the UK bank at finer rates, without having to obtain ECGD-backed sources of finance.

^ Medium-term ECGD-backed finance. ECGD provides a specific bank guarantee to a bank to finance export credit terms of two years or more. The finance is covered by bills of exchange drawn on the overseas buyer or by promissory notes in favour of the exporter. To obtain a bank guarantee, an exporter must have ECGD insurance, usually the supple­mental extended terms or specific cover.


190

191


Once bills have been accepted on behalf of an overseas buyer and confirmed as valid by a bank abroad there is no recourse to the exporter. Evidence of shipment and an ECGD warranty are required in the same way as for short-term guarantees.

Contracts with a minimum value of Jl million can be fi­nanced in foreign currency, usually US dollars or Deutsche-marks. Interest is payable at a preferential rate, depending on the length of credit and the particular country of the over­seas buyer. The UK bank charges a commitment fee. Con­tracts with buyers in EEC countries are not eligible.

An exporter must, at the earliest possible moment in con­tract negotiations, check that ECGD is willing to provide in­surance cover and a specific bank guarantee, and at the same time check with the UK bank for its agreement in principle to provide the finance, given ECGD backing.

Preshipment finance is also available on contracts of over Jl million, subject to certain limitations imposed by ECGD.

Comprehension .Answer the following questions:

  1. List finance facilities when export credit is required for
    more than two years.

  2. When is it advisable to sell a product to a leasing company
    rather than to an overseas buyer? Why?

  3. How is payment made when the goods are exported on a
    hire purchase basis?

  4. What are the advantages of selling goods on hire purchase
    through a finance house:




  1. for .the exporter?

  2. for the overseas buyer?

5. What part do merchant banks play traditionally in ex­
port/import trade?


  1. In what cases are Eurocurrency loans usually required?

  2. List different types of credit facilities available for certain
    projects.

  3. To what companies and in what contracts do some UK
    banks offer a forfaiting service?

  4. How does a forfaiting service operate?

10. What is an aval?

11. What are the advantages of an aval arrangement for the
exporter?

  1. What does ECGD provide for British exporters?

  2. Do Russian exporters enjoy similar facilities? If yes, what

bank are they provided by?

14. What is the export finance provided by ECGD covered

by?

  1. How does a bank guarantee protect the exporter?

  2. What export contracts can be financed in foreign cur­
    rency?




  1. What does a preferential rate in interest payment de­
    pend on?

  2. What must the British exporter do when negotiating an
    export order?

Comprehension. Complete the, following on the basis of the information given in the lext:

  1. Selling to a leasing company is best suited when

  2. When the goods are sold on hire purchase through a fi­
    nance house, the exporter and the overseas buyer

  3. Medium and long-term export finance may be arranged
    through

  4. By private placements or public offerings of bonds in the
    Eurobond markets, money to


192

193

5. Medium and long-term export credits are usually secured

by

  1. Sometimes future project income can be taken as

  2. Under an aval arrangement, the exporter

  3. Under an aval arrangement, the exporter doesn't need to
    have

  4. Bills of exchange or promissory notes cover provided

by to

10. When the bills have been accepted by an overseas buyer

and confirmed by his bank

11. It is risky for the British exporter to enter export nego-

tiations without


  1. They help to avoid difficulties with domestic leasing.

  2. Paying in partial payments.

  3. Financing of down-payments by buyers for large projects
    abroad .

  4. Opposite of "fixed rate".

  5. A firm or individual to whom something is entrusted.

  6. Penalty or fine for neglect or causing losses.

9. An unconditional guarantee for a bill.

10. Bills recognized by the bank as good.

1 1 . Finance cannot come back to the exporter. 12. Money paid for bank operations.





Ill

The text you have just read introduces several terms which are either already known to you (e.g. hire-purchase, instal­ment, interest rate etc.) and listed in the Active-Vocabulary section to remind you, or terms meaning the same in Russian (e.g. leasing). Hence, there should be no difficulties in un­derstanding its contents.

On the other hand, however, there are some points to be discussed: first the meaning of finance which may be both a noun or a verb. Then the term option meaning here choice or possibility. Equity participation means here shareholding Notice also combination with "Euro" (e.g. Eurobond, Eurocurrencies, Euromarket). Remember also that similarly to a cheque drawn on a firm or an individual, you can also draw a bill of exchange on the buyer.

^ Give the proper financial term for their following descrip­tive definitions listed below:

r

  1. Payment which is not settled immediately.

  2. Leases made by a company to an overseas buyer.

194

Complete the following:

1 . At the earliest possible moment in export contract nego­tiations the exporter applies to ..... and ..... to make sure that the bank ......

2. When ECGD agrees to ..... and the contract ..... the ex-

porter ......

  1. When the exporter's application has ..... ECGD ......

  2. On receipt and acceptance of the bank guarantee, the ex­
    porter ..... and .......

  3. After signing a recourse agreement with ..... the ECGD
    ..... which in turn ......

6. When the goods have ..... and the shipping documents
with ECGD insurance warranty ..... to ..... the UK bank

7. Once the documents and bills sent by the UK bank have
by finance

195

Test. Fill in the missing words:

Leasing

This form of has grown considerably in the last de­
cade and offers the use of without the investment of

capital or other liquid

The advantages of leasing locally in the country of

are:

  1. The lessee is not exposed to currency

  2. The lessee obtains for 100 per cent of the delivered

costs.

3. The lessee may negotiate rental over a period which

matches the useful life of the

Midland Montagu Leasing Limited, a of the Midland

Bank Group, can assist exporters of goods in introduc­
ing them and their .. to major leasing in most parts

of the world. In certain countries where the Group has es­
tablished a operations, first hand assistance can be

given to the in his negotiations with the overseas buyer

in the provision of facilities.

^ Unit Eight

Medium Term Export Finance

1   2   3   4   5   6   7



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