Physical commodity deals are capital hungry. Producers need prepayment before harvest or extraction, traders need working capital to lift and ship cargoes, and end buyers expect credit terms once the goods arrive. On top of that sit freight, storage, hedging and a stack of operational costs that cannot wait until final payment. This is where commodity transaction funding comes in.
Instead of straining general corporate lines, a well structured commodity facility links funding to specific trade flows. Lenders gain comfort from the goods, receivables and risk controls around the transaction. Borrowers access repeatable liquidity that grows with volume, not just balance sheet size.
Commodity transaction funding is short to medium term finance that supports a defined trade cycle in physical goods. It typically runs from purchase of the commodity, through storage and transport, to sale and collection of receivables. Repayment comes from the proceeds of that sale, not from an unrelated income stream.
These facilities sit inside the wider family of structured trade and commodity finance. They are usually self liquidating, revolve with each new shipment, and are secured by a mix of title over goods, receivables, cash collateral, guarantees and in some cases security over hard assets such as storage or processing sites.
At the front of the cycle, producers or first handlers need capital to buy inputs, harvest crops, mine ore or lift crude and refined products. Pre export facilities advance funds against forward sales contracts, confirmed off take agreements or hedged positions. Lenders look closely at production track record, logistics and the credit strength of the end buyer.
In some cases, large buyers agree to prepay part of the purchase price in return for secure access to production. That prepayment can then be syndicated or refinanced by banks and private credit funds, reducing concentration risk on both sides.
Once goods are produced, capital is tied up in stock and cargo on the water. Inventory and in transit facilities give borrowers advance rates against warehouse receipts, tank certificates, trust receipts or bills of lading. Control is everything. Lenders want reliable collateral managers, reputable warehouses, and clear rules on release of goods.
These structures are common in metals, energy, agri and petrochemicals, where volume and ticket sizes justify the operational effort. Done properly, they free up working capital without undermining security.
At the back of the cycle, receivables finance allows traders and producers to convert invoices from reliable buyers into cash today. Discounting confirmed letters of credit, forfaiting, and structured payables programs all sit in this bucket. The underlying risk shifts from the commodity itself to the buyer balance sheet.
For large industrial buyers, supply chain or payables finance can support their own working capital profile while giving suppliers faster access to cash. That stability often matters as much as price when managing critical inputs.
In practice, many commodity facilities blend these stages. A single borrowing base line might cover pre export, stock in transit and receivables, with different advance rates and controls by stage. That gives borrowers continuity of funding while giving lenders clear triggers for margin calls, top ups or stop shipments if risk indicators move.
The art is in structuring covenants and controls that work in real trade, not just in a spreadsheet. That is where specialist advisory support adds value.
Although each deal is bespoke, most transactions draw on a familiar toolkit. Understanding these tools helps borrowers speak the same language as lenders and credit committees.
Commodity funding is not just about assets on paper. Serious lenders focus on four pillars: people, product, process and protection. Weakness in any one of them can sink an otherwise attractive opportunity.
Funding physical trade exposes lenders to price moves, default, fraud and operational failure. Well structured facilities address these risks directly, not with marketing language but with concrete measures.
Commodity transaction funding is not just for global majors. It can support a wide range of participants, provided their flows are real, traceable and commercially sound.
Financely works as an arranger and advisor through regulated partners, not as a balance sheet lender. Our role is to turn scattered documents, emails and spreadsheets into a coherent credit case that serious lenders can underwrite.
For qualified sponsors and traders, we help:
If you handle real trade flows and need structured capital to scale them, our team can review your transactions, prepare the file, and coordinate targeted approaches to lenders that understand commodity risk.
Submit Your Commodity Funding RequestDisclaimer: This page is for general information only and does not constitute advice, an offer, or a solicitation to enter into any transaction. Commodity transaction funding involves credit risk, price risk, operational risk and legal risk. Financely acts as advisor and arranger through regulated partners and is not a bank, broker dealer or fund manager. Any facility or investment is subject to full underwriting, KYC, AML, sanctions screening, legal review, documentation, perfected security where applicable and approvals by relevant stakeholders. Professional and wholesale audience only.
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Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.
Financely advises growth-focused businesses on accessing capital by introducing their opportunities to professional investors. Financely is not a securities broker or dealer. Where appropriate, engagements are coordinated with regulated broker-dealers, investment banks, legal counsel, and other specialists.
Financely does not solicit, offer, or accept orders to buy or sell securities and makes no assurance regarding capital-raising outcomes.
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Advisory services are reserved for post-revenue companies that recognize the time and resources required for professional underwriting.
All mandates start with an RFQ. We review submissions, issue a brief Go/No-Go memo, and where bankable, release a Term Sheet that leads to funding. We arrange capital across Senior Secured, Unitranche, Second Lien/Mezzanine, Preferred Equity, and Gap Solutions. We do not process deals by email or chat.
Letters of Credit, Standby LCs, Confirmations, Receivables Finance, and Inventory Lines with control.
Funding arranged for trade flows with instruments sized to your cycle and aligned to delivery and settlement.
Move forward to secure working capital and keep goods moving. Submit the RFQ to start underwriting for funding.
Limited or non-recourse structures for energy and infrastructure with lender-ready materials.
Funding solutions aligned to project cash flows with credible covenants and conditions to reach notice to proceed.
Advance the file to termable status. Submit the RFQ so we can underwrite and secure funding.
Debt and Preferred solutions anchored on cash flow, Quality of Earnings, and clear closing mechanics.
Funding across senior, unitranche, and preferred to match stable cash flows and acquisition timelines.
Get financed on workable terms for closing. Submit the RFQ to start underwriting.
Acquisition, development, bridge, and refinance with lender-ready packs and third-party reports managed.
Funding calibrated to DSCR, leverage, and tenancy with terms designed to close.
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Financely Inc. (“Financely”) provides corporate-finance advice and is wholly owned by Aurora Bay Trust, a trust formed under Bahamian law, together with its authorized affiliates. Depending on deal structure, jurisdiction, and local rules, engagements may be carried out through Financely Group LLC, a non-deposit-taking, non-banking financial company; Ashford Capital Advisory LLC; or another related entity.
Financely and its affiliates are not registered as securities broker-dealers and do not execute securities transactions or hold client funds or securities. When a mandate involves the purchase or sale of securities and a registered intermediary is required, any orders are introduced to and executed by one or more independent U.S. broker-dealers registered with the SEC and FINRA. Those broker-dealers are solely responsible for trade execution, custody, and related regulatory obligations. Nothing in this material constitutes an offer, solicitation, or recommendation to buy or sell any security or to engage in any specific transaction. Before engaging Financely Group LLC, Ashford Capital Advisory LLC, or any affiliate, you are responsible for confirming that such engagement complies with your own legal, regulatory, tax, and other requirements. In the United States, certain advisory activities may be conducted in reliance on exemptions available under the Investment Advisers Act of 1940, including the “foreign private adviser” exemption where applicable. Our services and regulatory status may vary by jurisdiction and by transaction type.
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