Project Financing Mechanism : trade finance

Wednesday, October 21, 2020

Trade Finance loans & Usage

Trade finance represents the financial instruments and products that are used by companies to facilitate international trade and commerce. Trade finance makes it possible and easier for importers and exporters to transact business through trade. Trade finance is an umbrella term meaning it covers many financial products that banks and companies utilize to make trade transactions feasible.

How Trade Finance Works:

The function of trade finance is to introduce a third-party to transactions to remove the payment risk and the supply risk. Trade finance provides the exporter with receivables or payment according to the agreement while the importer might be extended credit to fulfill the trade order.

The parties involved in trade finance are numerous and can include:

Banks
Trade finance companies
Importers and exporters
Insurers
Export credit agencies and service providers

Trade financing is different than conventional financing or credit issuance. General financing is used to manage solvency or liquidity, but trade financing may not necessarily indicate a buyer's lack of funds or liquidity. Instead, trade finance may be used to protect against international trade's unique inherent risks, such as currency fluctuations, political instability, issues of non-payment, or the creditworthiness of one of the parties involved.

Below are a few of the financial instruments used in trade finance:

Lending lines of credit can be issued by banks to help both importers and exporters.
Letters of credit reduce the risk associated with global trade since the buyer's bank guarantees payment to the seller for the goods shipped. However, the buyer is also protected since payment will not be made unless the terms in the LC are met by the seller. Both parties have to honor the agreement for the transaction to go through.
Factoring is when companies are paid based on a percentage of their accounts receivables.
Export credit or working capital can be supplied to exporters.
Insurance can be used for shipping and the delivery of goods and can also protect the exporter from nonpayment by the buyer.

Although international trade has been in existence for centuries, trade finance facilitates its advancement. The widespread use of trade finance has contributed to international trade growth.

How Trade Financing Reduces Risk:

Trade finance can help reduce the risk associated with global trade by reconciling the divergent needs of an exporter and importer. Ideally, an exporter would prefer the importer to pay upfront for an export shipment to avoid the risk that the importer takes the shipment but refuses to pay for the goods. However, if the importer pays the exporter upfront, the exporter may accept the payment but refuse to ship the goods

Reduce the Risk of Financial Hardship

Without trade financing, a company might fall behind on payments and lose a key customer or supplier that could have long-term ramifications for the company. Having options like revolving credit facilities and accounts receivables factoring can not only help companies transact internationally but also help them in times of financial difficulties.

See if you can talk to us about loans against trade finance.

For more information.

futureloansiom@gmail.com

loans@floans-iomltd.com

Website: https://www.floans-iomltd.com

Phone: +44 077 4168 0089

Monday, October 12, 2020

Advisory Services we PROVIDE

Advisory Services we provide to our clients, which include deal structuring advisory services, due diligence services, and a group of mandatory Know Your Customer and Anti-Money Laundering services, are integral parts of our core business and are vitally important for our client’s success. The deal structuring advisory service provides to support our trade finance and project finance services.

We take Deal Structuring very seriously and we are exceedingly good at it. While it is not a glamorous, marquis service, it is the segment of our core business where innovation and decades of accumulated expertise are combined to create deal structures that protect our clients against negativity.

When correctly conceived and executed, our deal structuring advisory service shields you from risk and positions that will accord more profit on every deal. (KYC) KNOW YOUR CUSTOMER program obligates by global financial institutions to develop a Customer Identification Program or CIP to confirm the identity of customers or potential customers who intend to perform financial transactions with the institution. The Know Your Customer program, which was created pursuant to the EUROPEAN Patriot Act, is a financial regulation that targets financial institutions and financiers who do business internationally.

We undertake a full complement of counter-party trade finance due diligence investigations as part of any trade financing transaction in which we or any client of Global Trade Funding is involved.

We understand the importance of thoroughly vetting every participant in a trade finance deal, thereby ensuring that no fraudulent or unworthy applicants filter into the day to day operations of the business of our business or that of our clients.

FUTURE LOANS (IOM) LIMITED will help you with all you need to soar higher within the spheres of trade and export finance.

Whatever loans you need, FUTURE LOANS (IOM) LIMITED will make it happen.

Over the past 10 years we have successfully secured over $800 million dollars in business loans to finance franchise start-up locations, expansion locations, business acquisitions, store remodels, equipment loans, new construction & commercial real estate purchases, partner buy-outs, and debt refinance/consolidation loans.