Trade Finance

Trade Finance

A trade finance loan is an advance denominated in either domestic currency or the foreign currency of the payment obligation, enabling exporters/importers to finance their trade commitments on a transactional basis. A trade finance loan must be subject to a genuine underlying trade transaction evidenced by appropriate trade documentation.

An open account method is used to settle import and export transactions between two international trading parties. Clearance of outstanding balances on the account is at mutually agreed periods. This payment method requires absolute trustworthiness on behalf of both parties. The risk is with the exporter under this type of open account transaction.

Benefits

  • Access to finance for the purchase ofgoods or services prior to shipment
  • Ability to offer extended payment terms to your buyers
  • Access to competitive interest rates.
  • Receive a purchase price discount through prepayment or payment "at sight" rather than payment on extended supplier terms
  • Perform trade finance transactions electronically.