Extending credit: trade finance firms may be the answer.

Marlon Martin Parris, president of Brooklyn-based Savanah International Inc., has been selling medical supplies, construction equipment, food and beverages to the Caribbean for three years. But he's been making deals as if his two-employee firm is a major corporation.

Recently, Parris started negotiating sales with foreign firms need to pay their bills in 60, 90 or 120 days. But that leeway hasn't fazed Parris since he started working with trade finance firms to of r credit to foreign buyers.

Extending credit to customers is often the key to remaining competitive and sealing deals in the international arena, explains Ken Kleban, president of Connecticut Intermodal Associates Inc., a trade finance firm in Weston, Conn.

After making the coveted sale, most small business owners need payment up front. Many international buyers, however, are downright cash poor.

Following in the spirit of MasterCard, some overseas buyers are purchasing credit terms and paying a tad more for products in return for skipping payment up front.

Small exporters, like Parris, who are unable to offer credit through their own companies are signing on with trade finance firms to help them offer such seductive credit terms.

Such financing programs allow the exporter to negotiate and arrange the sale as usual. Then, the trade finance company purchases the product from the exporter at the time of shipment. The trade finance firm re-invoices the foreign buyer to include a financing charge for the extended payment terms offered to them. Before any deal is signed, the exporter discusses this process with the foreign buyer who is willing to pay for the extra time.

Fees range from 5% to 10% of the transaction 60-day terms, .nd 2% is customarily added for each subsequent 30-day period.

In some cases, the fees are absorbed by the exporter. The exporter takes a cut on his profit but, according to most entrepreneurs anticipate and incorporate the fees into the original selling price, so they are absorbed by the buyer in the first place.

The reluctance of commercial banks to extend significant lines of credit to entrepreneurs have opened the doors for trade finance firms. While they are a solid capital resource, many won't do business with you if your orders are just several thousand dollars.

The Bankers Association for Foreign Trade is an association of banking institutions that sponsors the Access to Export Capital Program (AXCAP), a national listing of banks and other companies involved in trade finance. Call 800-49-AXCAP.

No one is looking to match up fly-by-night firms or help you borrow from Peter to pay Paul. However, if you don't want to pass on customers who need credit, keep this option in mind.