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Financing Of International Transactions

Author

Listed:
  • RADU NICOLAE BALUNA

    (UNIVERSITY OF CRAIOVA, FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION)

  • DANIEL GOAGARA

    (UNIVERSITY OF CRAIOVA, FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION)

Abstract

Financing (funding) is essentially the purchase of funds necessary for a business. This can be done from internal sources (company’s own funds) or external (borrowed funds). The high value of goods traded in international trade makes revenues generated from internal resources not sufficient to settle the value of the goods. Thus, it is frequent to resort to borrowed funds. In International Business Transactions, external financing is done both by classical techniques of credit (credit supplier and buyer credit) and modern techniques of financing (factoring, forfeiting, leasing) all trade tailored. In terms of the length of financing, accounting funding is short-term (1-12 months) and long-term financing (over a year). In principle, export and import operations prevailing short-term financing techniques, while international investment and industrial cooperation actions are specific long-term funding.

Suggested Citation

  • Radu Nicolae Baluna & Daniel Goagara, 2013. "Financing Of International Transactions," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 136-140, February.
    • Handle: RePEc:cbu:jrnlec:y:2013:v:1:p:136-140
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    References listed on IDEAS

    as
    1. Adela Breuer & Mihaela Lesconi Frumușanu & Beatrix Lighezan Breuer & Dorel Jurchescu, 2011. "External Financing for Construction Entities," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(2), pages 55-62.
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