Getting Paid for Latin American Sales: What US Exporters Should Know

A large and abundant market awaits US exporters in Latin America. Although the combined GDP of Brazil and Mexico alone stands at over $1.5 trillion, US companies approach the region with skepticism. Real and perceived risk in financing and payment issues is a common reason for placing Latin American markets in third-place when expanding globally, usually behind European Union and Asian economies.

Often, lower-than-desired profit margins from sales in the region are a sort of self-fulfilling prophecy: in seeking to avoid slow re-payment or default risk, US exporters attach upfront payment terms that make them less competitive against foreign competitors who, by the way, might collect higher prices just by extending conventional, 30- or 60-day terms on account.

US exporters need look no further than a great resource published by a private-public collaboration. Just a click away at BUYUSA.GOV, the US Commercial Service offers a comprehensive guide, produced in cooperation with PNC Bank and Fedex. This trilingual guide identifies several financing and payment mechanisms available to support US exporters selling to Latin America. The first page alone features an excellent reference chart that should be put to daily use by sales, operations, and accounting teams.

Being better informed about resources at hand, and staying abreast of what competitors might also have at their disposal, will remove initial fear, uncertainty, and doubt for US exporters about getting paid and preserving profit margins.