Despite an uncertain economy in 2020, global trade continues to grow. The World Trade Organization estimates it will increase by 8% in 2021 as companies get back to business. With the US being the world’s largest importer of goods and second-largest exporter in the world, many companies are doing more business internationally than ever before.
While there are many benefits of partnering with international companies, there are also inherent risks. Before granting credit to a new international customer or doing business with a cross-border supplier, the best way to protect your business is to get an international business credit report, so you can evaluate the financial health of your partner.
When buying international business credit reports, however, there are several things you should know.
Finding the Right International Business Credit Reporting Company
Not all credit reporting agencies can provide international business credit reports everywhere. Some specialize in certain parts of the world, but may not have a truly global reach.
For example, Credit Reports World is strong in Mexico, Latin America, and South America. If you need international business credit reports in Canada, Equifax Canada is your best choice. In the United Kingdom and much of the European Union, Experian International will likely provide the best coverage.
You should get expert guidance to find the right company for your business needs. Fortunately, the experts at Command Credit can help you assess your needs and match you up with the best source for your international business credit reports. Through partner agencies worldwide, reports are available in more than 200 countries.
Getting the Information You Need
Before you buy international business credit reports, you also need to know what information you will be getting. While the US has a robust credit reporting structure and you can pull business credit scores instantly, many countries do not.
You should be aware that in many parts of the world, pulling together international business credit reports means manual work, such as calling banks and lenders, creditors, and suppliers to gather information. This can add to the length of time it takes to receive the report and the cost to produce it.
For example, it might take 10-12 business days for some international business credit reports, although there are options available for urgent requests for an additional fee.
Depending on the country and the agency you choose, most reports feature information such as:
- Company identification and verification
- Officers, directors, or partners
- Key credit ratios
- Share capital structures
- Adverse legal proceedings
- Credit risk assessment
- Credit line recommendations
Getting Fresh Information
A lot has changed in the past two years. Even many companies with strong track records are struggling financially. As government aid for businesses affected by the pandemic is ending, many companies are making the difficult decision of whether they can continue. Experts expect a sharp increase in bankruptcies worldwide, ending the year 26% higher than in 2020.
When checking international business credit reports, you must have fresh information. In many parts of the world, real-time data does not exist. Yet, a credit report that was last updated a year or two ago does not reflect a company’s current financial situation. Make sure any credit reporting agency you work with is providing current data.
Unlike in the US, much of the data that is available needs to be freshened up to be valuable to you. This may require additional investigation to ensure the data is current.
Making Smarter Business Decisions
This information can help you make smarter business decisions about which companies to do business with and under what terms. For example, you can answer questions such as:
- How likely is an international company to declare bankruptcy within the next 12 months?
- How likely is it that I will get paid on time?
- Should I extend credit to an international company and, if so, how much credit should I grant?
- Is an international business linked to other companies?
Armed with information about a company’s financial health and stability, you can move forward confidently knowing that you are protecting your business interests.
How to Check My Business Credit Score
Just as you are checking out your prospective international business customers and suppliers, they are likely checking out you as well. It is a good idea to check your business credit score so you know what they are seeing.
We can help you get the best international business credit reports that will help you monitor customers and suppliers. Request a consultation with our international business credit experts.
