How Companies Can Raise Trade Finance Capital

Why Companies Raise Trade Finance Capital

• Working Capital Timing. Cash goes out before cash comes in. Trade facilities bridge deposits, production costs, freight, duties, and the receivable period.
• Counterparty Risk. Buyers ask for performance protection; sellers ask for payment certainty. Credit instruments solve stand-offs and clear audits.
• Tenor And Terms. Buyers may require one hundred twenty to one hundred eighty days to sell down; sellers expect payment at shipment. Structured letters of credit and discounting connect both sides.
• Supplier Demands. Cash in advance or deposits can stall projects. Guarantees and standby letters can replace cash or reduce the size and duration of deposits.
• Scale And Repeatability. Framework contracts, seasonal ramps, and multi-lane supply chains need predictable lines and fast draw mechanics.

Capital Routes At A Glance

Risk Transfer That Unlocks Capacity And Pricing

• Trade Credit Insurance. Buyer-specific or whole-turnover cover that supports discounting of receivables and improves bank appetite. Policies can be assignment-friendly to lenders.
• Political Risk Insurance. Cover for transfer restrictions, expropriation, political violence, and contract frustration in higher-risk corridors.
• Hedging. Forwards and options set at shipment and maturity dates to keep currency exposures predictable for lenders and credit committees.

Our Role From Intake To Closing

We act as arranger and transaction lead. We are chaperoned with lenders and insurers, which allows full engagement without breaching contact rules. Counterparties receive one consistent file, one point of contact, and one process owner through issuance or first draw.

1. Intake And Proof Of Trade. We confirm the contract, Incoterms, production or shipment plan, insurance, and commercial logic. If the flow is not real, we stop the file.
2. Structure. We choose the instrument set: DLC, usance or Usance Payable At Sight, SBLC or URDG guarantee, receivables or inventory line, PO financing, RCF, or private credit. We define draw mechanics, reimbursement paths, assignment of proceeds, and security.
3. Wording And Controls. We draft UCP 600, ISP98, or URDG 758 texts line by line, set presentation periods, original document counts, inspection logic, and certificate issuers by name where practical. We prepare discrepancy and waiver playbooks.
4. Underwriting Pack. Cash flow model, borrowing base template, shipment schedule, collateral narrative, counterparty checks, sanction screening outputs, and a clean data room. Files are short and bank-readable.
5. Distribution. We approach banks, private credit funds, insurers, and where suitable, export credit agencies. For capital markets work, we coordinate 144A or Reg D documentation with counsel and trustee or paying agent.
6. Term Sheets And Negotiation. We target two to three comparable proposals for clean files. We push spreads into a competitive band for the actual risk and remove non-core fees. If pricing or conditions do not clear, we say so and close out.
7. Closing And Issuance. Conditions precedent, account control, Society for Worldwide Interbank Financial Telecommunication message mapping for issuance and reimbursement, and settlement. We monitor to first presentation or first availability, with a defined post-close period.

Our Lender, Insurer, And Market Access

• Commercial Banks. Issuance of DLCs and SBLCs, confirmations, reimbursing bank roles, and receivables or inventory lines.
• Private Credit Funds. Term loans and RCFs tailored to trade cycles, second-lien and unitranche options, and purchase order financing for proven programs.
• Trade Finance Funds. Short-tenor paper purchases, receivable discounting platforms, and forfaiters active on avalised bills and LC-backed obligations.
• Insurers And ECAs. Short-term trade credit policies, political risk cover, and ECA-backed structures where export content qualifies.
• Capital Markets Intermediaries. MTN program set-up, 144A or Reg D execution, trustee and paying agent coordination, and insurer-led wraps for investor acceptance.

Team, Skills, And Why We Are Qualified

• Trade Banking And Documentary Practice. Former bank trade desks and documentary operations staff who have reviewed and issued thousands of credits and guarantees.
• Credit And Structuring. Lenders and analysts who have built borrowing bases, set reserves, and reviewed concentration and aging tests in real portfolios.
• Capital Markets And Legal. Practitioners who have worked on 144A and Reg D notes, MTN programs, and trustee documentation. ISP98 and URDG 758 drafting experience with a focus on clean claims and enforceability.
• Insurance Placement. Brokers and former underwriters who arrange trade credit and political risk policies that lenders accept and can assign.
• Operations And Logistics. Shipping and warehousing professionals who can validate vessel, route, storage, collateral management agreements, and inspection flows.

Our collective track record spans exporters, importers, commodity traders, manufacturers, project contractors, and distributors. We have closed transactions in low-risk markets and in frontier corridors. We do not publish deal counts or totals; we let clean execution and repeat mandates speak for themselves.

Selecting The Right Instrument Mix For Your Case

1. Map The Risk. Payment risk, performance risk, logistics, and currency. Decide what must be proven to release cash.
2. Choose Control Or Speed. Documentary control through DLCs, or on-demand protection through SBLCs and guarantees. Blend where both are required.
3. Design Liquidity. Receivables and inventory funding for scale. Discounting at sight for usance or Usance Payable At Sight. PO financing for locked deposits.
4. Set Tenor And Exit. Maturity aligned to the sell-down period and collection cycle. Clear take-out: LC proceeds, insured receivables, or operating cash flow.
5. Add Insurance And Hedging Where It Pays. Cover that improves approval odds and pricing, and hedges that keep currency exposure inside covenants.

Documentation Standards That Reduce Friction

• UCP 600 credits with goods description that mirrors the contract, accurate Incoterms, clear latest shipment dates, presentation periods, and original document counts.
• ISP98 standby texts with precise draw statements, expiry rules, and named certificate issuers where required.
• URDG 758 guarantees with presentation place, claim requirements, governing law, and brief cure periods where reasonable.
• Society for Worldwide Interbank Financial Telecommunication message map for issuance, amendments, and reimbursement: MT700/710, MT760, MT742, MT767, and status via MT799 where applicable.
• Notice of assignment and controlled collection accounts for receivables structures; collateral management and inspection rights for stock-based lines.

Pricing And Negotiation Approach

We price to the actual risk and the actual work required. Spreads reflect counterparty strength, country risk, tenor, currency, and document complexity. Confirmation fees track issuer limits and corridor risk. For receivables and inventory lines, advance rates, reserves, and audit costs matter as much as the headline rate. Our approach is to surface the full cost stack early, remove non-core add-ons, and lock the mechanics that drive time and leakage.

Scenario Playbook

1. New Buyer In A Mid To High Risk Market. Confirmed DLC with discount at sight for cash at shipment. If confirmation is limited, pair a DLC with trade credit insurance and a receivables facility. Avoid open account until there is performance history.
2. Supplier Requires A Thirty Percent Deposit. Replace cash with an advance payment guarantee or a standby letter for refund risk. If cash is unavoidable, fund through PO financing with the guarantee in place and a defined take-out through LC proceeds or insured receivables.
3. Distributor Needs One Hundred Twenty Days To Sell Down. Usance LC or Usance Payable At Sight with a confirmed discount agreement fixed before shipment. Tie the discounting bank into the issuance flow.
4. Commodity Trader With Storage And Transit. Borrowing base across receivables and stock, tri-party collateral management at approved warehouses, title transfer in transit, and a currency hedge mapped to outturn and collection dates.
5. Program Scale Beyond Bank Limits. MTN or private placement under 144A or Reg D with trade credit insurance as a wrap. Use proceeds to fund receivables purchases or inventory availability. Keep reporting and triggers transparent for investors.

SPV, Controls, And Governance

Where segregation helps, we set a special purpose vehicle with a nominee director, dedicated bank accounts, and clear intercompany agreements. Assignments, pledges, and step-in rights sit with the lenders. If receivables are sold to the SPV, we document true sale conditions, set eligibility and concentration rules, and define trigger events that pause purchases and protect funders.

Eligibility And Documents To Begin

Frequently Asked Questions

This page addresses corporate users. Nothing here is a commitment to lend, insure, or invest. All services are subject to know-your-customer checks, anti-money-laundering controls, sanctions compliance, and approvals by banks, funds, insurers, and, where relevant, export credit agencies and investors. We work on a best-efforts basis and all lender and investor communications are chaperoned.