UPS Capital makes further inroads into Latin America
February 03, 2011
In an effort to expand its presence in Latin America and help facilitate global trade, UPS Capital, the financial services subsidiary of UPS, announced this week it has opened new offices in Bogota, Colombia and Lima, Peru.
Company officials said that with these new offices UPS Capital will be able offer specific kinds of loans to qualified businesses in Colombia and Peru to finance the import of capital goods and inventory components.
UPS Capital’s primary objective is to provide significant benefits to its customers, including helping them to mitigate trade risk, and providing financing solutions for importer/exporter supply chains.
“Many U.S. exporters that we work with identified Colombia and Peru as important trade lanes, and export destinations for their goods and services,” a UPS spokesperson told LM. “These new offices represent a natural extension of UPS extending its presence in these important markets, and are an example of how we help companies compete and grow globally. UPS Capital has been working in Latin America for many years, with watchful consideration as to when export traffic warranted permanent representation.”
UPS Capital has more than 300 employees. In Latin America and the Caribbean, UPS employs more than 8,000 employees, contractors, and service providers, including more than 400 (employees, contractors, service providers) in Columbia and more than 170 (employees, contractors, service providers) in Peru. UPS Capital also has people on the ground in the United States, Belgium, Canada, China, Hong Kong and Taiwan, as well as in-country representatives in Argentina, Brazil, Chile, Colombia, India, Mexico and Turkey, and it has supported goods imported by companies in more than 40 countries around the world.
In terms of types of services UPS Capital provides for customers, the spokesperson provided a few different examples.
As one example, the spokesperson cited a foreign medical clinic wanting to purchase new equipment but does not have the liquidity to pay the U.S. manufacturer 100 percent of the acquisition costs. The U.S. manufacturer—or exporter— wants to be paid in full at time of shipment, but the clinic wants to repay the loan over a longer term (or the useful life of the equipment). UPS Capital in this case can provide a loan to the clinic with a term of up to seven years, and UPS Capital will pay the exporter at the time when the equipment is picked up by UPS at the U.S. manufacturer’s dock. The U.S. exporter gets paid quickly, and the foreign clinic can repay the loan over a period of time that best matches their cash flow.
In another example, the spokesperson cited a foreign importer needing ongoing monthly shipments of raw materials to meet sales and production schedules. If the U.S. exporter desires to be paid at time of shipment, UPS Capital can provide the foreign importer with a line of credit to support their purchases of the U.S. exported inventory.
“In both of these examples, these transactions are supported through export credit agencies, such as the Export-Import Bank of the United States, which provides government guarantees on the loans,” explained the spokesperson.
Other services provided by UPS Capital include global trade finance, trade protection services, credit cards and related services and payment-acceleration services.
“By offering Colombian and Peruvian companies greater access to the services and capabilities offered by UPS Capital, we are able to further facilitate trade with the United States,” said Bob Bernabucci, president of UPS Capital., in a statement. “As a key player in global trade, growth in all exports contributes to UPS’s business of serving the logistics needs of our customers.”
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