Lender Checklist for Trade Finance Deals

If you lend against trade flows, speed and control decide outcomes. Miss one sanctioned counterparty, one broken warehouse seal, or one sloppy LC clause and a good margin turns ugly. This lender checklist distils what credit teams, funds, and private lenders should lock down before wiring a cent into a trade finance facility. Borrowers can use the same list to build lender‑ready data rooms and cut approval times. Copy, share with your team, and keep it beside the deal screen.

1. Borrower & Group Review

• Legal name, registry extracts, group chart, UBO attestation.
• Audited financials (last 2 yrs) + latest interim; covenant add‑backs explained.
• Bank statements covering recent trading pattern; reconcile to contract volumes.
• FX exposure policy and hedge track record.

2. Counterparty Chain & Contract Proof

• Signed purchase &/or offtake contract with price formula and Incoterms.
• Evidence of buyer credit quality (rating, trade refs, LC bank).
• Back‑to‑back structures: match quantities, specs, shipment windows.

3. Collateral Control

• What is pledged: goods in warehouse, goods afloat, receivables, or LC proceeds?
• Warehouse receipts or field‑warehouse agreements naming security agent.
• Cargo tracking feed (vessel AIS, inspector reports, weight/grade certs).
• Advance rate vs cost or confirmed sale; cap at 80‑85 % unless insured.

4. Cash Dominion & Collections

• Pledged collection account at agreed bank; dual signatory or lender sole sign.
• Assignment of proceeds under LC / SBLC / AR invoice.
• Sweep order: buyer funds → loan paydown → margin release.

5. Documentation Pack

6. Insurance & Risk Wraps

• All‑risk marine cargo to 110 % CIF value; political risk where needed.
• Credit insurance on buyer default if unsecured receivable risk exceeds limits.
• War / strike extensions on sensitive routes.

7. Sanctions, ESG & Regulatory

• Screen every party: ship owner, charterer, port, buyer, end user.
• Origin/destination restrictions (dual‑use, conflict minerals, quota rules).
• ESG red flags: deforestation, forced labour claims, water stress.

8. Covenants & Monitoring

• Borrowing base cert frequency (daily / weekly).
• Max days sales outstanding; auto lock if breached.
• Margin call triggers by price or quantity variance.
• Reporting pack: position, hedges, cash, insurance status.

9. Red Flags That Freeze Funding

• Unsigned or mismatched contracts across supply and sale legs.
• Warehouse receipts issued by unbonded operators.
• Insurance without lender named first loss payee.
• LC expiry earlier than voyage ETA.
• Repeated last‑minute beneficiary changes.

10. How Financely Helps Lenders & Borrowers Close Faster

• Pre‑screen data room against this checklist in 24 hours; gap report returned.
• Standardised collateral schedules and advance‑rate models (warehouse, afloat, receivable).
• Global inspector and surveyor panel so field checks start early.
• Template assignments for LC, SBLC, receivable proceeds under English or NY law.
• Ongoing portfolio monitoring dashboards: exposure, LTV, insurance expiry, sanctions alerts.

Material here is guidance only and not legal, credit, or investment advice. Trade finance lending carries risk of loss. Financely arranges and advises; final credit rests with the funding bank or fund. Minimum ticket generally USD 2 million. Full KYC / AML required.