Trade Finance – Taking care of Business
There is only one true method of valuing a company.
Return on Capital invested is a sure fire way of ranking performance and if you dont
have enough capital you go out and find some. For the majority of trading and distribution
companies this is a constant issue, even more so if they offer credit terms to their customers.
In the “green shoots phase” after the lockdowns ended in Asia, business suddenly started to pick up.
Some of the largest wholesalers, who had done the right thing and held onto their staff, lacked
the readies to roll over the sudden rise in import shipments and subsequent supply
to the supermarket giants that they supplied throughout Asia.
Through good contacts in London we introduced a revolving line of credit that got things moving again.
Scope of Work
Export Finance
Manufacturers with an export orders benefit from a short-term agreement that gives them access to working capital while they wait for importers to pay their invoices.
Documentary Letter of Credit
Most banks will issue an LC made out to the supplier of the goods and typically good for a term of 30 – 90 days with fees dependent on the financial strength of the buyer, their relationship with the bank and the specific goods being traded.
FMCG and manufactured products are acceptable for an LC but frozen product may attract a premium in terms of fees and livestock not so much, lest it become deadstock during the journey.
Having the goods insured is also an excellent idea and we can put you in contact with the correct people for this.
Importers & Distributors
Almost all suppliers will demand full payment before the ship leaves the port of lading and the sometimes two months sailing and trucking time is “dead money” as far as the buyer is concerned.
For established importers and distributors we can arrange payment against the invoice value. Not only does this free up some working capital but is often cheaper than using a facility with the importers bank (normally borrowing against a FD held at the branch at usurious rates) .
Foreign Exchange
Our company is a broker for several large global FX outfits and can quickly get the best rates for a shipment as well as longer term FX partnership arrangement that offers ongoing professional support 24/7. Some of the features of such an arrangement are listed below:
- Commercial project finance
- Highly competitive exchange rates (much better than your bank)
- No commission or international transfer charges
- Ability to fix exchange rates for a set time period, helping protect from adverse currency movements