Hi @Tommy Pool ,
First, make sure external sharing is enabled at tenant level and site level.
https://learn.microsoft.com/en-us/sharepoint/turn-external-sharing-on-or-off
https://learn.microsoft.com/en-us/sharepoint/change-external-sharing-site
Then as the site owner, you have many ways to share the folder to an external user. In addition to the methods of directly clicking the share button and using copy link introduced in the article Share SharePoint files or folders, you can also use manage access to share:
1,Select the folder you want to share, right-click, select manage access, and a pop-up window will pop up.
2,Click the three dots in the upper right corner of the pop-up window, then click Advanced settings to enter the permission settings page.
3,Click Stop Inheriting Permissions to interrupt permission inheritance, then click Grant Permissions and enter his account and the permissions you want to grant it in the pop-up window. Click share and the other party will receive the email.
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