Most of the trade finance conversation stops at ninety days. A lot of our own writing has stopped there too. For anyone selling capital equipment, ninety days is roughly where the real problem starts.
Let me separate two things that get lumped together and should not be.
Short-term trade credit is the world of open account terms, thirty, sixty, ninety, sometimes a hundred and twenty days, usually paired with tools like credit insurance, factoring or working capital finance. It exists to manage the near-term risk and cash gap on familiar, repeatable orders. It is a good and necessary set of tools, and if that is your situation, use it.
Medium-term buyer financing is a different instrument for a different problem. It is a five to seven year loan to your buyer for the purchase of your United States capital goods, with an Export-Import Bank of the United States guarantee behind it. You are paid in cash at shipment. Your buyer repays over years, as the equipment earns its keep.
Here is why the distinction matters, and why stopping at short-term quietly costs manufacturers real business.
If you sell a two million dollar machine to a buyer in an emerging market, that buyer is not going to pay you in ninety days, and no amount of credit insurance changes that. A capital purchase gets paid for out of the cash the equipment generates, and that takes years, not months. Offer that buyer ninety-day terms and you have offered them nothing they can use. Offer them five to seven years and you have offered them a way to say yes.
This is also where a very common search leads people astray.
Manufacturers who feel the terms pressure often go looking for working capital finance or factoring, thinking those will let them bridge the gap. They will not. Working capital finance and factoring fund you, in the short term, so your own operation keeps running. They do nothing for a buyer who needs to spread a capital purchase across several years. Using a short-term, self-funding tool to solve a medium-term, buyer-funding problem is the single most common wrong turn I see.
Now put yourself in the buyer’s shoes for a moment, because that is where the deal is actually decided. A buyer comparing your equipment against a European or Asian competitor is not only comparing specifications and price. They are comparing how they can pay. Your rivals routinely arrive with multi-year, government-backed financing for their buyers as a standard part of the offer. If your best answer is cash on delivery or a short credit period, you have lost before anyone opened the technical file. You were not beaten on quality. You were beaten on term.
Medium-term buyer financing closes exactly that gap, and it does so without putting the weight on your balance sheet. We can finance up to sixty percent of the equipment price before it even ships, and you are paid in full at shipment. You are not carrying a multi-year receivable on a customer you cannot monitor from another continent. The buyer gets terms their local bank would never offer, and you get cash now. Deals typically run from one million to thirty million dollars, though we have structured transactions well beyond that.
None of this replaces the short-term toolkit. Keep your credit insurance, keep your working capital line, keep factoring if it serves you. Just be clear about what each one is for. Short-term trade credit keeps the near-term book healthy. It was never built to fund a five-year capital purchase, and pretending it can is how good orders quietly slip away.
So here is the exercise worth doing. Look back at the capital-goods deals you did not win last year, the ones where the buyer clearly wanted the equipment and then could not make the numbers work. Ask whether the real obstacle was price, or whether it was that the buyer needed years to pay and you could only offer months. If it was term, that was never a short-term problem, and no short-term tool was ever going to solve it.
The machine was never the hard part. Giving your buyer a way to pay for it over the life it will actually serve them is the whole job.