Andrew Legge has found a unique niche as founder and managing partner of Havelock Wool, a three-year-old, seven-employee business that processes its insulation in Reno, Nevada, and distributes it out of Brooklyn, New York.

Legge, who sells his insulation domestically and exports it to Canada, dreams of the day when he can persuade the buyers of the sheep’s wool home insulation he sells to pay him in 30 days and his wool suppliers, based in New Zealand, to give him 90 days to pay them.

“That’s an important goal in terms of being a manufacturer—actively managing, in the most advantageous way possible, what is going on with your cash,” says Legge, who formerly worked in the private equity industry.

Like many exporters who understand the value of cash flow, Legge is looking into supply-chain financing.

In supply chain financing, sellers of goods, such as Legge’s insulation, can—via their bank—optimize working capital for both themselves and their suppliers. With the financing in place, sellers can lengthen their payment terms to its own suppliers, while giving its suppliers the option to get paid early.

In one common type of scenario, a bank may provide you with working capital to buy the supplies you need for a product you plan to export and, if you need accelerated payment terms, set up a structure where you get paid within five days of delivery, explains CPA Anthony Tomaro, a partner at Grassi & Co., a New York City area accounting firm and head of the firm’s subgroup on Manufacturing & Distribution of Foods.

Many exporters find it is an ideal solution to the cash-flow challenges that emerge in transactions that stretch out for months from the point where a distant client places and order. “We’ve seen higher volumes this year,” says Richard Rowe, director of Supply Chain Finance for SunTrust Robinson Humphrey. “The rumblings are that the current administration is very supportive of manufacturers and that may be leading to increased requests.”

Supply-chain financing can seem complicated if you’ve never used it before, so it’s important to understand the process fully. Here are some tips on how to make the most of it.

Understand when it makes sense. Supply-chain financing lets a supplier sell its invoices to the bank at a discount, once the buyer approves them. Generally, supply-chain financing works best when your customer’s credit is better than your own. “If you think about the risk back to the bank, it’s based off of our corporate client’s credit risk ratings,” notes Rowe. “The discount rate, which is based on the credit rating of the buyer, would be superior to where the supplier would be able to raise funds on their own.”

Find the right banking partner. Although you may love working with your local bank, it may not be the best provider of supply-chain financing for you. “A lot of times you have a great banker who can get anything done in the U.S.,” Tomaro says. “If you go outside the border, you want to make sure they have the bandwidth to help you. If not, you may have to consider going to a bigger bank or a bank that has those services.”

Working with a bank that has many branches overseas can be particularly helpful. If your client is located in a city where a branch is located, bankers in that branch may well know your customer. That can make the due diligence process easier and could help you avert disaster if you are considering doing business with a client that does not pay up. “You need to know they are legit,” says Tomaro.

Banks that do frequent overseas business may also have better technology and infrastructure set up to manage supply chain financing. For instance, when one of Tomaro’s clients was exporting coconut water, he worked with JPMorgan Chase to set up the supply-chain financing.

“They had the capability of knowing who the people on the ground were at the other side of the world,” says Tomaro. “That reduced that risk. At the same time, we were able to track our shipments. We had control of the documents. We knew where the goods were. We knew when they were clearing customs. At the end of the day, it’s making sure you are moving products from Point A to Point B as efficiently as possible.”

Also consider what a bank will charge you—and ask your accountant to walk you through what the bank explains if you still don’t understand what the actual costs will be. “Their cost structure could be a lot different from Bank A to Bank B,” Tomaro says.

Customize it. Supply chain financing may take many forms, so make sure you are clear with your banker about what type of help your business needs. “The market for supply chain finance programs is somewhat diverse and there is no centralized place where you can go to gather data on global supply chain financing programs,” notes Rowe.

At SunTrust, for example, the bank offers clients’ suppliers an opportunity to sell receivables early at a discount. That may sound like factoring, but it is different, Rowe explains, in that the bank obtains irrevocable obligations to pay a certain amount by a certain date from the exporter’s clients. With factoring, it is possible the value of the invoice will be diluted if the client does not pay the full amount of the invoice.

One appealing aspect of selling receivables early at a discount in this way is that while the clients are aware of the supply chain finance program, they do not know if any particular supplier has sold receivables. “This is an arm’s length transaction,” says Rowe.

Plan for the future. Once you do have supply-chain financing in place, make the most of it to take advantage of opportunities in the marketplace. Recently, for instance, Chinese buyers of the wool Legge uses shifted to purchasing it in the U.K. instead of New Zealand. As a result, prices in New Zealand plunged.

“All of a sudden, I’m buying wool at a 40 percent discount,” he says. “We understand supply-side dynamics. We always want to be positioned to take advantage of these things as they occur.”

With supply-chain financing in place, exporters like Legge can position themselves to take advantage of scenarios like this in the future.