Faster travel and digital technology have opened international markets to a wide range of businesses.
But operating across borders can complicate securing trade finance.
With that in mind, these four tips to secure a loan for an international business can help you create a watertight proposal for your credit provider.
Study the market
With thorough research it’s possible to spot a gap in the market that local entrepreneurs and international competitors may have missed.
Mobile communications firm Digicel has Irish roots but spotted a gap in the Jamaican market in 2001 — then expanded rapidly across the Caribbean region.
But they also used insight to cut themselves a slice of the massive remittance market by ensuring their app allowed mobile accounts to be easily topped up by relatives abroad.
So take time to thoroughly work through your offering and identify the pros and cons of your plan to move into a new market.
Presenting this research to a finance provider will convince them your plan has real potential.
Capitalising on an opportunity you’ve identified also relies on developing a keen awareness of the cultural norms and conventions of different nations.
Communicating fluently in the local language is an obvious first step — but more subtle nuances can still be lost in translation.
And you should value the expertise of the locally-engaged staff you employ — their input is invaluable no matter what role they fill.
Loan providers will likely take your keen local knowledge into account when deciding whether to back your business.
If you plan to operate in a sector that’s subject to strict regulation you’ll have to ensure that the standards applied in your home nation are sufficient to meet the demands of regulatory regimes in the host country.
This is particularly important when it comes to health and safety.
For instance, foreign firms investing in heavy industry or engineering in the UK should ensure that their entire estate of lifting equipment is compliant with UK loler inspection laws.
Proving you’re acutely aware of regulation will reassure a loan provider that your operations won’t be shut down for non-compliance.
Whether you’re employing staff remotely or in a physical office, it’s crucial to seek advice about local employment laws.
And you should also review the immigration and tax status of any existing employees you’re sending abroad.
A global payroll solutions firm such as SD Worx can offer advice to ensure you don’t get tangled in red tape before you can transfer wages to international employees.
Once a finance firm knows you’re aware of tax and payroll compliance they’ll realise you’re unlikely to get tangled in red tape.
These four tips to secure a loan for an international business should help you secure the required finances for a smooth launch and sustained success.
Do you have any tips on securing a loan for an international startup? Share your advice in the comments section.