Old World Industries, a Northbrook, Ill., automotive-product manufacturer and distributor that sells worldwide, has had plenty of problems collecting and repatriating foreign funds. "In China we learned -- after the fact -- that the Bank of China is not a single bank but a network of provincial banks, only some of which have liquidity and foreign-exchange capabilities," complains John Jackson, Old World's corporate credit manager. Collections there took as long as 18 months.
If your company is doing business abroad, it's essential to tap into an international banking network that helps expedite collections and quickly transfers funds to the United States. Jackson's advice? "Work with an American bank that can help evaluate the political risks within a country as well as its banking risks, and gauge how to avoid them if possible." Here's how to find a U.S. bank that fits the bill:
Look for a strong international presence. A qualified U.S. bank will have an established network to repatriate funds quickly. Lenders such as Citibank have massive overseas operations but may be too big to work with a small company. Instead, question major regionals about overseas connections.
Demand technical expertise. Your U.S. bank should know about liquidity problems and should recommend collection strategies in other countries. Look for a proactive banker who can point out financially troubled areas to avoid.
Vet potential banks through your international accountants. A Big Six firm or international accounting network should know if your U.S. bank is right for you.* * *