Structured Trade Finance & International Letters of Credit A quick definition: The financing of finished goods being supplied from anywhere in the world and the UK for a client who has a written purchase order from a customer, we can credit underwrite or on whom there is credit insurance available. Trade Finance allows our clients to export or import in confidence. Trade finance is often used in conjunction with other finance products, but not exclusively. Invoice Finance used in conjunction with Trade Finance allows the client end customer greater flexibility and cash flow. We provide the following structured trade finance solutions.
The types of Trade Finance We Provide:
- Import Loans
- Structured and Revolving Trade Finance Facilities
- Shipping Finance
- Opening Letters of Credit, providing irrevocable payment undertaking
- Commodity Trade Finance, funding raw materials, metals, copper and commodities such as coffee.
- Finance to Import and Export products Globally and UK to UK trade.
- Stock Finance and Purchase Order Finance
- Available Globally regardless of your country of residence. Also transactions for New Start Companies.
Apply Online for Trade Finance or Call Phillip Evans 07970500425.
What is Structured Trade Finance
Structured trade finance is a transactional funding solution to allow a (seller) to acquire goods on the strength of their customers (purchaser) confirmed purchase order. The power of this product allows a business owner or entrepreneur the ability to source and sell goods without necessarily having the cash or capital to physically buy the products from its supplier. Trade finance bridges the gap between the confirmed purchase order and the supplier requiring payment up front.
Trade Finance linked to Asset Example:
We were recently asked by to assist one our clients who had sourced a machine in Turkey, which was pre-sold to a company in the UK. The UK Company had an asset finance facility agreed. The machine was to be inspected prior to shipment by Societe Generale de Surveillance and payment was required by way of a letter of credit in favour of the Turkish supplier. We firstly confirmed the order with the ultimate purchaser and then contacted [Asset Finance Company] who agreed that they would accept an invoice from Trade Finance and pay in accordance with our instructions. The letter of credit was opened and the machine arrived in the UK.
Put Trade Finance into your Company To put trade finance into your company contact Phillip Evans or Apply Online for Trade Finance
Trade Finance Linked to In Invoice Factoring:
A new start company dealing in textiles: This company used to manufacture in the UK and was a family owned company run by Father (now our client), Mother and two sons. Unfortunately the Mother died and the Father decided to go on a round the world yachting holiday (with boats being his passion), to get over the trauma. He left the business in charge of his two sons and was away for two years. When he returned the business had declined, although, was still marginally profitable and the two sons wished to go and pursue other interests. It was apparent to our client that manufacturing was not the way forward and he decided to establish alongside the existing business, an importing company. Utilising his contacts and establishing a small but elite team to help him run the business, he landed a major order from (Major PLC) for cushions, throws and dog/cat baskets. Having done a small amount of importing in the past he established an office in Hong Kong to assist him with Chinese production and in particularly quality control. The new start business had £100 share capital and need to open £350K worth of letters of credit to satisfy the Next order and to factor the resultant debtors. Profit margins on these products are 30%+ and (Major PLC) have proved to be excellent payers. The company are now turning over £5M+, and their dependence on the support from Trade Services has dwindled but now use Invoice Discounting to fund their growth.
Trade Finance: Typical Criteria and Requirements.
- Products: Finished goods or at least very little assembly on arrival, Non perishable, No sale or Return, exclusions may exist for defence material.
- Your Transaction Confirmed purchase order from your customer and must be profitable for you. We would expect you to be making a minimum margin 15%, otherwise deposit required
- End Customer Must be credit insurable ( this is included in our finance costs)
- Facility – Revolving facility available. If this is a one off transaction with no repeat orders we may stipulate a minimum order value.
- Costs Dependent upon the size but an initial administration fee as a set up charge of 1-2%, can be taken from the profit on the first deal. Undrawn LC’s are 1% per month and drawn LC’s are 1 – 3% for first month and pro-rata after that.
- Country Exclusions may exist where Wars or Civil Unrest active
See how trade finance could help your business Apply Online for Trade Finance
To discuss trade finance options or to see if letters of credit could be right for your domestic or international business call Phillip Evans direct on 0797 0500 425 / email [email protected]