Contract‑Backed Financing for Commodity Transactions
Contract‑Backed Financing for Commodity Trades
Turn Signed Purchase Contracts into Immediate Working Capital
Whether you trade jet fuel, corn, copper, or consumer staples, the time lag between contract signing and final payment can choke cash flow. Contract‑backed financing converts that signed deal into upfront liquidity, so you can secure stock, book freight, and lock margins while the competition is still searching for credit lines.
Financely funds eligible commodity contracts across energy, agriculture, metals, and industrial supply chains. The structure is straightforward: we underwrite the counterparty, the contract, and the logistics plan—then advance capital against the receivable. Repayment aligns with buyer settlement, not with rigid amortisation schedules.
Who We Serve
- Physical traders and wholesale distributors scaling volumes
- EPC contractors sourcing steel, piping, or specialty alloys
- Agri‑processors aggregating seasonal harvests for export
- Energy marketers delivering refined products or LNG cargoes
- Manufacturers locking futures spreads on raw‑material inputs
Eligible Commodities
If the goods are tangible, priced, and traceable, we can usually finance them:
- Energy: Jet A‑1, diesel, LPG, LNG, bitumen
- Agriculture: Wheat, soybeans, sugar, rice, pulses
- Metals & Mining: Copper cathodes, aluminum billets, iron ore fines, gold dore
- Industrial & FMCG: Paper pulp, chemicals, packaged foods, consumer electronics components
How Contract‑Backed Financing Works
- Submit the Contract – You share the fully‑executed SPA or purchase order, plus KYC on counterparties and a shipping plan.
- Diligence & Structuring – We analyse buyer credit, performance history, Incoterms, and payment timeline. Risk mitigants—LCs, SBLCs, insurance—are layered in where needed.
- Term Sheet Issued – Advance rate (up to 90 %), pricing, tenor, and security package documented clearly.
- Funding Released – Capital flows to suppliers, production, or freight providers—often within five banking days of final approval.
- Repayment – We are repaid from buyer proceeds, LC drawdown, or insured receivable collections. If the buyer pays late, built‑in buffers handle the slippage.
Why Contract‑Backed Financing Beats Traditional Trade Loans
| Feature | Bank Trade Loan | Contract‑Backed Finance (Financely) |
|---|---|---|
| Collateral | Balance‑sheet security, blanket liens | Specific contract rights & receivable |
| Advance Rate | 50–70 % typical | Up to 90 % on strong counterparties |
| Speed to Close | 4–8 weeks, multiple committees | 5–10 business days after paperwork |
| Covenants | Fixed‑charge cover, leverage, MAC | Performance undertakings only |
| Off‑Balance Treatment | No | Often yes (true sale / assignment) |
| Scalability | Cap‑ex heavy; bank limits | Grows with signed contract volume |
SEO Snapshot: Key Search Phrases We Solve
Clients find us when they look for:
- contract‑backed financing
- commodity trade finance
- funding signed commodity contract
- pre‑export finance for agriculture
- receivables financing for metal trades
- working capital for energy traders
If any of those phrases hit your Google history, you’re in the right place.
Risk Management Layers
- Buyer credit analysis, sanctions and AML screening
- Performance instruments (LC, SBLC, URDG guarantee) where required
- Cargo insurance, warehouse control and inspection options
- Assignment of receivables or proceeds under UCC/English law
- FX hedging linked to drawdown schedule
Information Checklist
To issue a firm quote we need:
- Signed purchase contract / SPA with commercial terms
- Corporate KYC for seller and buyer
- Latest management accounts or audit (seller)
- Logistics plan (Incoterms, shipment windows, inspection points)
- Any existing payment security (LC, insurance, etc.)
Frequently Asked Questions
Is this a loan?
Technically no. We advance funds against the receivable created by the contract—often via true sale, assignment, or secured funding. It can be structured off‑balance sheet, subject to accounting advice.
Do you fund part shipments?
Yes. We fund against each delivery note or bill of lading, releasing capital in tranches matched to contract milestones.
How is pricing set?
Spread over SOFR/EURIBOR plus a transaction fee—both driven by buyer credit grade, tenor, and commodity liquidity.
What if the buyer pays late?
Grace periods and reserved interest are built in. For longer delays, credit insurance or standby instruments trigger recovery.
Will you disclose our margin to the buyer?
No. We operate under NDA and structure funding around your commercial terms without exposing your economics.
Have a signed commodity contract and need capital this month? Request a detailed quote today.
Request a QuoteAbout Financely
Financely arranges specialised trade‑finance solutions for mid‑market commodity flows. We are arrangers, not deposit‑taking banks. All mandates are subject to due diligence, KYC, compliance, and market availability.
Get Started With Us
Submit Your Deal & Receive a Proposal Within 1-3 Working Days
Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.
All submissions are
promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.
Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.
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Submit a RequestOnce we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.
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.
