How to Get Bridge Funding for Physical Commodity Transactions

How to Get Bridge Funding for Physical Commodity Transactions

How to Get Bridge Funding for Physical Commodity Transactions

You have cargo to move and a clock that will not stop. Bridge funding fills the gap between contract and cash so you can buy, ship, clear, and sell without choking liquidity. Here is a blunt, bankable path to secure short-tenor capital for oil products, metals, and agri flows.

Outcome: a priced, documented facility matched to your trade cycle, with clear collateral control, fast draw and predictable repayment from LC proceeds, buyer collections, or repo exits.

Quick Fit Check

Good fit
Spot or short-forward trades with fixed offtake or LC from buyer. Clear title chain, reputable warehouse or terminal, and tight logistics.
Bad fit
Unverified counterparties, vague contracts, weak collateral control, or speculative price exposure with no hedging.
What lenders want
Contracts, title docs, storage control, inspection, insurance, and a clean repayment waterfall.
Deal killers
Soft offtake, unknown collateral managers, messy sanctions exposure, or gaps between risk and paperwork.

Accepted Bridge Structures

Structure Where it fits Collateral and control Repayment source
Pre-export finance Aggregation to FOB with signed offtake Warehouse receipts, CMA, insurance, assignment of sales proceeds LC proceeds or buyer collections to controlled account
Inventory finance at port or terminal In-tank, in-warehouse stock awaiting sale or transfer Title docs, terminal agreements, collateral manager, all-risk cargo cover Repo exit or sale to named buyers
Trust receipt or import loan (D/P or LC) Arrival to clearance and local sale cycle B/L control, pledge over goods and receivables, TR agreement Customer payments under controlled collections
LC-backed transactional line Buyer opens LC, lender funds against it pre-shipment or at sight Assignment of LC, doc-to-doc match, inspection if required Payout from nominated or confirming bank

Collateral and Control That Win Approval

Title and storage
Original B/L or warehouse receipts in lender control. Recognized terminal or warehouse with clear release conditions.
Collateral manager
Named firm with track record. Daily stock reports, loss payee endorsements, and audit rights.
Insurance and inspection
All-risk cargo cover, terminal cover, political risk if needed. Independent inspection and quality certs.
Cash waterfall
Assigned proceeds to controlled account. Clear priority to lender, then costs, then profit release.

Step by Step to Funding

Stage What happens Tips to move faster
1) Intake KYC, counterparty list, contracts, shipment plan, pricing and hedge plan, storage details. Name warehouse, inspector, insurer up front. Share buyer bank LC template if used.
2) Term sheet Advance rate, tenor, margin, fees, covenants, collateral manager and insurance terms agreed. Keep tenor tight. Tie reductions to turn, not dreams.
3) Underwriting Risk memo, stress on price and FX, offtake checks, legal on storage and title. Lock hedges early. Provide LC drafts or buyer credit packs.
4) Docs and controls Facility, pledges, CMA, account control, insurance endorsements, inspector LOAs. Use issuer-approved templates where possible.
5) Draw and settle Funds released against docs checklist. Repayment from LC proceeds, repo, or AR collections. Report stock, movements, and sales weekly. No surprises.

Fees and Cost Buckets

Bucket Who pays Notes
Margin over base Borrower Priced on risk, tenor, and controls.
Arrangement and underwriting Borrower Covers diligence, modeling, and legal review.
Collateral manager and inspection Borrower Daily control, drawdown, and stock reporting.
Insurance and endorsements Borrower Cargo, storage, liability, loss payee clauses.
SWIFT and bank ops (if LC-backed) Per deal wording Issuance, advising, and reimbursement costs.

Documents Lenders Ask For

Document Purpose
Contracts and addenda Defines volumes, specs, pricing, and delivery terms.
Title and storage agreements B/Ls, warehouse receipts, terminal agreements, release conditions.
Inspection and quality certs Independent verification for lenders and buyers.
Insurance policies All-risk cargo, terminal, and liability with loss payee to lender.
Buyer payment comfort LC draft, credit insurance, or approved buyer list with limits.
KYC and corporate file Ownership, sanctions screening, and authority to sign.

Risk Controls That Protect Margin

Price and FX
Hedge exposure to match tenor. No naked positions during the bridge.
Counterparty
Approved buyer list, limits per counterparty, concentration caps.
Operations
Named inspector, daily tank or stock reports, release only after lender consent.
Cash discipline
Controlled collections, sweep to reduce, and lockbox for AR flows.
Attention. Vessel dates are set and storage costs tick daily.
Desire. Fund the trade, keep title secure, and settle on time while protecting spread.
Action. Send your contract pack and shipment plan. We return a lender route, advance rate, and a closing checklist you can execute this week.

How We Get Your Bridge Funded

Lender and issuer route
Private credit funds, trade banks, and repo desks that fund your corridor and product set.
Control stack
Collateral manager, storage terms, insurance, account control, and assignment wording ready for signature.
Underwriting file
Risk memo, hedge map, cash waterfall, buyer credit notes, and inspection plan that pass credit.
Execution control
We track dates, messages, and docs from term sheet to draw so the cargo stays on schedule.

Deliverables

  • Named lender route with advance rate and tenor
  • Collateral and control term sheet with CMA, insurance, and inspection terms
  • Cash waterfall and repayment map tied to LC proceeds or AR collections
  • Underwriting pack and legal checklist to close
  • Timeline aligned to laycan, storage, and delivery dates

Need Bridge Funding For Your Next Cargo

Share your SPA or PO, storage plan, inspector, insurer, buyer details, and shipment dates. We will bring back a lender route, controls, fees, and a draw timeline that matches your trade.

Start the Process

This page is informational. Any facility is subject to lender due diligence, independent credit approval, KYC and AML checks, sanctions screening, and executed documentation. Advance rates, pricing, and timelines depend on goods, corridor, storage, controls, and counterparty quality.

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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.


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