Private Debt For Physical Commodity Traders: Facilities, Security, Underwriting

Private Debt For Physical Commodity Traders | Structures, Covenants, And How To Get Funded

How Physical Commodity Traders Raise Private Debt

Traders need working capital that matches voyage time, storage, and collection risk. Banks can be slow or full on limits. Private credit funds and specialist lenders will step in if the file is clean, collateral is real, and the cash waterfall is tight. This page shows the structures that get approved, what underwriters look for, and how we run a disciplined auction to a binding term sheet. If you want product depth and examples, open our Structured Commodity Finance page. No em dashes are used in this document.

Snapshot: We structure, underwrite, and distribute trade deals for metals, agri, energy, and chemicals. Facilities include pre export finance, borrowing bases, inventory lines under CMA, receivables purchases, and offtake backed prepayments. Security rests on title, control, and insurance. We run a fixed calendar, push for clear covenants, and close with funds or banks that actually disburse.

Table Of Contents

  1. What We Deliver
  2. Who Funds These Deals
  3. Core Structures For Traders
  4. Underwriting Standards
  5. Security, Control, And Insurance Stack
  6. Pricing Ranges And Fees
  7. Process And Timeline To Commitment
  8. Data Room Checklist
  9. Mistakes That Kill Deals
  10. Raise Capital Now
  11. FAQ

What We Deliver

A lender grade package, a term sheet that clears credit, and a path to funding. We size facilities to your cash cycle, align collateral with policy, and lock in a waterfall that pays lenders first. We negotiate covenants you can keep and bring in insurers where a wrap lifts advance rates. After selection we coordinate counsel, security filings, and CPs so money lands when the cargo moves.

Who Funds These Deals

  • Private credit funds and trade finance funds. Revolvers and term lines secured on inventory and receivables.
  • Specialty lenders and family offices. Fast decisions for structured prepayments and inventory repo.
  • Banks for documentary legs. Issuance and confirmation of LCs, SBLCs, and UPAS legs paired with fund financing.
  • Insurers. Trade credit insurance, cargo and stock throughput, political risk. These improve structure and price.

Core Structures For Traders

Structure Best For Tenor Key Notes
Pre Export Finance Producer backed flows with offtake and hedges 6 to 24 months Assigned proceeds, DSRA, and price hedge policy
Borrowing Base Distributors and traders with recurring AR and stock Revolving Advance rates tied to aging, quality, and TCI limits
Inventory Line Under CMA Goods in tank, warehouse, or port storage 30 to 270 days Tri party control, inspections, and clear exit routes
Receivables Purchase Strong obligors, post shipment finance 30 to 180 days Non recourse with TCI wrap lifts advance rates
Offtake Prepayment Term deals with committed buyers 3 to 18 months Delivery schedule, make good rules, price collar
UPAS LC + Confirmation Imports where suppliers want sight and you need terms 90 to 360 days Sight for supplier, usance for buyer, bank risk sits with confirmer

Underwriting Standards

Credit clears when cash flow, collateral, and control line up. We test flows at stress, not in a perfect month. We keep the memo blunt so decision makers do not waste time.

Area What Lenders Look For Typical Tests
Cash Cycle DIO, DSO, DPO fit the tenor and limits Waterfall model with delays and partial pays
Price And FX Hedge policy and margining discipline DSCR at stress, basis risk mapped
Counterparties Buyer credit, country caps, sanctions clear Eligibility matrix and obligor limits
Collateral Title, control, assay or quality, insurance CMA terms, inspection cadence, claims history
Legal Enforceable security and tax clean Perfection steps and intercreditor map

Security, Control, And Insurance Stack

Layer Purpose Evidence
Title And Lien Control goods and proceeds Bills of lading, warehouse receipts, UCC or local filings
CMA Or Tri Party Independent custody for inventory Signed CMA, inspection reports, release rules
Account Control Lock the cash waterfall ACA, blocked accounts, assigned LCs
Insurance Cover physical and credit loss Cargo and stock throughput, TCI, PRI with lender loss payee

Pricing Ranges And Fees

Pricing follows quality of collateral, counterparty set, country risk, and tenor. Expect ranges, not miracle rates.

Facility Type Spread And Fees Notes
Borrowing Base Revolver SOFR plus 400 to 800 bps, 1 to 2 percent upfront Higher for frontier or weak obligors
Inventory Line Under CMA SOFR plus 500 to 900 bps, 1 to 2 percent upfront Inspection and CMA costs separate
Receivables Purchase Discount 6 to 14 percent annualized TCI backed pools price better
PXF Or Prepayment SOFR plus 600 to 1100 bps, 1 to 3 percent upfront Hedges and strong offtakers help

Process And Timeline To Commitment

Week What Happens
Week 1 KYC, mandate, data room normalized, underwriting memo drafted
Week 2 Distribution to funds, banks, and insurers through regulated partners, Q and A window
Week 3 Best and final bids, select preferred lender, heads of terms signed
Week 4 Docs, security, insurance bindings, CP list fixed
Week 5 CPs satisfied and first draw or instrument issuance scheduled

Practical range is three to five weeks. Delays come from slow documents, inspections, or insurance wordings. We clear those early.

Data Room Checklist

KYC and ownership chart. Three years financials and year to date management accounts. Borrowing base template if you have one. AR and AP agings with concentrations. Inventory by location and SKU. Top buyers and suppliers with terms and Incoterms. Sample LCs and contracts. Hedge policy and current positions. Insurance policies. Facility request with amount, tenor, collateral, and jurisdictions.

Mistakes That Kill Deals

  • Loose title and no control of proceeds.
  • Hedge gaps and basis risk ignored.
  • Concentrated buyers with no TCI or limits.
  • Weak warehouse or tank control, no CMA.
  • Sanctions red flags and sloppy KYC.
  • Cash flow models that work only if everything goes right.

Ready To Raise Private Debt For Trading

Open our structured commodity finance page, then send your file. We will underwrite, structure, and run a clean auction to a firm commitment.
Open Structured Commodity Finance

Contact Financely Group

FAQ

What facility sizes are realistic
From 5 million to 200 million USD equivalent depending on tenor, collateral quality, and obligor set. Larger syndications are possible with multiple lenders and insurers.
Do we need trade credit insurance
If buyer risk drives the deal, yes. TCI lifts advance rates and lowers price. Named debtor or whole turnover structures are both workable if limits are real and exclusions are understood.
Can you work alongside our existing banks
Yes. We can add a parallel facility or carve out with intercreditor terms. Documentary legs can sit with banks while funds provide the revolver behind them.
How long to first draw
Three to five weeks is typical if the data room is complete and inspections or insurance bindings move quickly. Slower if title or KYC is messy.
What collateral counts the most
Clear title to goods, tight CMA or tri party control, solid AR from rated or insured buyers, and a blocked account waterfall. Everything else is window dressing.

Financely structures, underwrites, and distributes opportunities to banks, funds, and insurers through regulated partners. Financely is not a broker dealer and does not issue securities or letters of credit. Nothing here is an offer or a commitment to lend. All transactions are subject to KYC, AML, and sanctions screening, verification of materials, third party approvals, and market conditions.

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