Trade finance signifies financing for trade, and it concerns both domestic and international trade transactions. A trade transaction requires a seller of goods and services as well as a buyer. A financer can facilitate these transactions by financing the trade.
The function of trade finance is to act as a third-party to remove the payment risk and the supply risk, whilst providing the seller (exporter) with accelerated receivables and the buyer (importer) with extended credit.
This service enables firms or persons to begin or expand international trade ventures, generating revenue growth and securing higher profits in various industries.
Moreover, a trade financier helps firms overcome the challenges inherent in international trade by assisting or undertaking difficult and risky parts of their working procedures, including the duration and cost of transportation, secure delivery and payment, money exchanges and transfers, forwarding or clearance, etc.
As a professional trade financier, we at this service strive to provide maximum profit and productivity for our applicants by focusing on the reducible costs of the trade procedure.
For example, by having several multi-currency bank accounts in different countries, we minimize the cost of currency conversion and money transfers. Or because of the aggregation of different customers' shipping volumes in our system, concluding large shipping contracts at a reasonable price is more accessible to us, than to each of those customers.
And for these reasons, in many cases where the applicant has received this service to facilitate his old business, after using this service, he has achieved even more profit than before.
In trade finance service, there are a variety of options for cooperation with the applicant, about which we will be as flexible as possible and will carefully consider each proposal, but the following is a summary of the main (not all) options available;
This service is designed to cover the gap between when an exporter is able to turn inventory and trade receivables into cash.
This service allows the exporter to receive up to the full amount of the invoice in the country of origin, while preserving the Importer's normal payment credit terms and without burdening the importer's balance sheet, so trade transactions become more flexible and increase in volume.
This service is a financial transaction in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount.
A business will sometimes factor its receivable assets to meet its present and immediate cash needs or to speed up cash flow. In such a situation, factoring is the best and fastest possible solution.
Supply chain financing (or reverse factoring)
It is a form of financial transaction wherein a third party facilitates the trade by financing the supplier on the customer's behalf.
Unlike traditional factoring (where a supplier wants to finance its receivables), supply chain financing is initiated by the ordering party (the customer) in order to help its suppliers to finance its receivables more easily and at a lower interest rate than what would normally be offered.
Trading credit line
In this service, we use our bank assets to provide bank instruments for our clients so that they can use these instruments to make a revolving payment plan or any other credit purchase agreement with their suppliers. These bank instruments include the following;
• Letter of Credit (LC)
It is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.
• Bank Guaranty (BG) / Standby Letter of Credit (SBLC)
It is a type of financial backstop offered by a lending institution. The bank guarantee means that the lender will ensure that the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank will cover it.
If any of these services are of interest to you or you have any other ideas for making a trade finance agreement, get in touch with us through contact us section in the main menu.
We look forward to hearing from you and being able to help make your dreams come true.