How to Raise Private Capital for Commodity Trading and Import Export Deals

How to Raise Private Capital for Commodity Trading and Import Export Deals

How To Raise Private Capital for Commodity Trading and Import Export Deals

Mid market traders and import export operators win mandates when they show bankable structure, clear controls, and a clean data room. Capital sources range from private credit RCFs and inventory repo to 144A notes, private placements, and sponsor equity. This guide sets the steps, documents, and terms that move a deal from teaser to funded.

Who This Guide Serves

Physical Traders
Oil and products, metals and concentrates, agri bulks, softs.
Importers and Distributors
Repeat lanes with predictable DSO and audited accounts.
Producers and Offtakers
Pre export structures with assigned proceeds and insurance.
Family HoldCos and SPVs
Sponsor equity and note programs to scale working capital.

Capital Options For Trade Programs

Private Credit Facilities
  • Borrowing base RCF against eligible AR and inventory
  • Inventory repo with title transfer and CMA oversight
  • Confirmed LC issuance and discounting
  • Insured receivables securitization and forfaiting
Capital Markets and Equity
  • 144A senior secured notes for seasoned issuers
  • Private placements to qualified investors
  • HoldCo or OpCo preferred equity for growth
  • Convertible notes to balance cash cost and upside

When To Use Which Instrument

Instrument Best Used For Repayment Source Key Controls
Borrowing Base RCF Ongoing working capital against AR and inventory Daily sweeps from lockbox to controlled account Eligibility tests, advance rates, covenants, BBC reporting
Inventory Repo Stock at port or warehouse with clear title Sale proceeds or buy back on exit Title transfer, CMA, daily marks, release conditions
Confirmed LC Discounting Exporters with usance LCs seeking early cash Confirming bank payment at maturity UCP 600 compliance, clean docs, bank and country limits
Insured AR Finance or Securitization Diversified obligors with trade credit insurance Collections from obligors or LC settlement Debtor limits, policy terms, concentration caps
144A Senior Secured Notes Seasoned issuers seeking scale and tenor Operating cash flow from trade program Collateral pools, reporting, trustee, covenants
Private Placement Notes or Preferred Equity HoldCo growth, program ramp, equity top up Dividends, cash sweep, or refinance Covenants, information rights, negative pledge

Step By Step: From Teaser To Funded

1

Screening And Fit

Lane analysis, obligor mix, DSO, inventory turns, jurisdiction and sanctions checks. Pick RCF, repo, LC, 144A or private placement path.

2

Structure And Indicative Terms

Define eligibility rules, advance rates, covenants, reporting, waterfalls, and security. Align insurance and CMAs. Issue an indicative grid.

3

Diligence And Underwriting

Audited financials, AR aging, inventory reports, trade contracts, LC texts, policies, KYC and AML, legal opinions, tax and FX mapping.

4

Placement And Credit Approval

Distribute to banks, private credit funds, insurers, or QIBs. Address credit comments. Lock final term sheet and closing checklist.

5

Closing And Go Live

Execute security, open controlled accounts, set BBC templates, connect reporting feeds, and fund the first draw.

Data Room Checklist

Category Documents
Corporate Constitutional docs, shareholder register, board approvals, group chart
Financial 3 years audited accounts, management accounts, cash flow, AR aging, inventory reports
Trade Master contracts, POs, invoices, BLs, inspection, Incoterms, LC texts
Controls Insurance policies, debtor limits, CMAs, warehouse receipts, escrow drafts
Legal and KYC Beneficial ownership, sanctions and AML screens, tax certificates, legal opinions

Typical Pricing And Terms

Facility Size And Tenor Pricing Range Notes
Borrowing Base RCF USD 10m to 250m. Revolving SOFR plus 350 to 650 bps plus fees AR up to 80 percent eligible. Inventory up to 50 percent eligible
Inventory Repo USD 5m to 150m. 30 to 180 days 9 to 14 percent all in Advance vs NOLV. Daily marks and release tests
Confirmed LC Discounting USD 2m to 200m. Up to 180 days usance Tenor driven. Bank and country risk adders UCP 600. Clean documents. Sanctions compliance
Insured AR Securitization USD 25m to 500m. Revolving pool SOFR plus 400 to 800 bps by tranche Eligibility, concentration caps, policy terms
144A Senior Secured Notes USD 100m plus. 3 to 5 years Coupon set by rating and collateral QIB only. Trustee and security package
Private Placement Notes or Preferred Equity USD 10m to 150m. 2 to 5 years 10 to 18 percent IRR target or fixed coupon Covenants, information rights, negative pledge

Core Covenants And Controls

Operational
  • Minimum equity and cash interest cover
  • Obligor caps and country limits
  • Hedging policy for FX and commodity risk
  • Reporting cadence for BBC, AR aging, inventory
Security
  • Assignment of proceeds and notice to buyers
  • Controlled accounts and escrow waterfalls
  • CMAs and warehouse receipts
  • Negative pledge and intercreditor language

Eligibility Signals Investors Like

Scale And Quality
Turnover above USD 100m. Repeat lanes. Recognized counterparties. Clean audits.
Controls And Data
Insurance, assigned proceeds, clear doc flows, reliable reporting stack.
Governance
Board approvals, policies, sanctions and AML culture, auditor credibility.

Mini Term Sheet Examples

Borrowing Base RCF
Limit: USD 50,000,000 revolving. Advance: AR 80 percent eligible. Inventory 50 percent eligible.
Pricing: SOFR plus 450 bps plus line and non use fees. Security: Accounts, inventory, assignments.
Reporting: BBC weekly then monthly. AR aging and inventory roll forward. Covenants per grid.
Inventory Repo
Ticket: USD 20,000,000. Advance: Up to 85 percent of NOLV by product and location.
Controls: Title transfer. CMA on site. Daily marks. Tight release conditions.
Tenor: 60 to 150 days with roll options. Exit: Sale proceeds or buy back.
144A Senior Secured Notes
Issuer: OpCo or HoldCo with track record. Size: USD 150,000,000 target.
Use: Scale trade program and refinance short term lines. Security: Pledged assets and accounts per indenture.
Investors: QIB only. Process: Offering memo, trustee, ratings if applicable, roadshow to institutions.

Request A Private Capital Plan

Share your lanes, counterparties, DSO, inventory profile, and target facility. We will respond with structure, pricing ranges, and next steps.

Start Client Intake

FAQ

What size checks are realistic

USD 5m to 250m for private credit lines. 144A can scale larger for seasoned issuers with strong controls and reporting.

Can we keep our core banks

Yes. Most programs add capacity alongside existing banks through confirmations, repo, or separate borrowing base structures.

How fast can this move

Simple confirmations can move in weeks once documents align. Borrowing base and repo lines take longer due to collateral and systems set up.

Do we need insurance

Often yes. Credit insurance supports advance rates and risk appetite. Policy terms must match eligibility tests and debtor caps.

What does equity solve

Coverage for margin top ups, ramp periods, or covenant headroom. Preferred or convertible terms can soften cash cost while aligning upside.

What kills deals

Weak audits, unclear title, sanctions exposure, poor reporting, and over concentrated obligors. Fix controls and data flow before placement.

Financely provides advisory, underwriting, and arrangement services through regulated partners. Financely is not a bank and does not issue letters of credit or make loans. All transactions are subject to underwriting, diligence, KYC and AML, investor or lender approval, and executed documentation. Ranges and examples are illustrative only.

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