WHAT IS TRADE FINANCE
Trade Finance is the provision of funding to a domestic trader, distributor, an exporter or an importer that bridges the time, responsibility and/or payment term gap between the delivery from a product producing entity in one location and delivery to the end customer in another location or country. Typically the funding will be made available for periods not exceeding 180 days.
Components of Trade Finance
The Basic Trade Finance Facility
This is a facility granted to an established business with a profitable track record and sound balance sheet. The providers of the funding rely primarily on traditional lending criteria and the balance sheet of the company when determining the facility quantum & criteria.
By becoming involved in the control of the transaction, InTF is able to provide a solution that is not dependent on the balance sheet of the client. InTF becomes involved in the purchase, shipment, payment, insurance, clearing and forwarding of the goods and receipt of payment from the end customer.
Where a business obtains orders for goods from credit-worthy customers, InTF may be able to arrange the purchase of the stock, relying on the credit-worthiness of the end customer. Such finance unlocks working capital by allowing InTF to play a larger role in managing the risks associated with the transaction.
Off Balance Sheet Stock Finance
Is applicable to businesses which have a track record and are involved with an easily identifiable and non-specialised products or raw materials. The solution suits businesses with fewer rather than numerous product lines and is ideal where the products are packaged into identifiable units. This allows for an off-balance sheet, inventory funding and storage solution designed to contribute to the growth of a business through outsourced control by InTF.
This option requires the business to fund the inventory only when it's needed for supply to a customer or is required in the manufacturing process.
Where deliveries are made to credit-worthy end customers, subject to funders political restrictions, InTF is able to arrange factoring of invoices in order to release funds for further trading.
Asset Based Finance
Subject to the viability and cash flows of the business, funding is available to purchase working assets or fund existing assets of the business. On-going financial reporting will be required during the structured repayment period.
InTF is prepared to look at any finance requirement a business may have.
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