Structured Finance for Commodity Trading: Keep the Cargo Moving When Bank Lines Freeze

1 Overview

One month Brent surges ten dollars overnight, the next it tanks. LME nickel jumps its daily limit, cocoa blows through historical highs, and your trade-finance bank slashes lines at the worst moment. Commodity flow waits for no one. Structured finance turns cargoes, receivables and throughput contracts into investable paper, so physical traders, refiners and exporters stay liquid even when margin calls and Basel rules choke traditional credit.

2 Why Structured Finance in Commodity Trading?

• Pre-export crunch: Fund production or lifting costs before the first shipment leaves port.
• Inventory build: Carry seasonal stock without sweating daily mark-to-market swings.
• Pricing gap: Bridge the thirty-to-ninety-day lag between delivery and payment from state buyers.
• Sanction overhang: Re-route cargoes through alternate ports while complying with evolving rules, backed by ring-fenced structures that comfort lenders.

3 Our Toolbox

Instrument	Typical Collateral	Advance Rate	Ideal Tenor
Borrowing-Base Revolver	Crude cargoes on water, refined product tanks	70 – 85 % of daily market value	12-18 months evergreen
Pre-Export Finance (PXF)	Metals concentrate off-take contracts	65 – 80 % of contracted price	3-5 years amortising
Inventory Repo	Exchange-grade metal in bonded warehouse	60 – 80 % of spot	90-180 days rollover
Receivables-Backed Notes	Letter-of-credit proceeds from investment-grade buyers	75 – 90 % of face	6-24 months pass-through

4 Deal Timeline

Day 1-7: Trade flow data room and contract stack arrive. We size headline proceeds and fees.
Day 8-25: Structure modelling, collateral audit and title checks across storage sites.
Day 26-45: Term-sheet auction with banks, commodity desks and funds. Trader selects best stack.
Day 46-60: Docs sign, collateral transfers, cash drops. Vessels keep loading.
Simple oil cargo repos can fund inside thirty days, multi-jurisdiction metal PXF needs the full window.

5 Case Snapshots

• West African crude trader: USD 150 m borrowing-base revolver at SOFR + 400 bps, 82 % advance on floating inventory, zero parent guarantee.
• LatAm copper concentrate exporter: USD 95 m PXF syndicated to three banks, priced at 3-month Term SOFR + 375 bps, five-year door-to-door tenor.
• European steel mill: EUR 60 m inventory repo on LME-deliverable nickel briquettes, 68 % loan-to-value, rolled every ninety days for eighteen months.

6 Risk Shields

• Daily mark-to-market triggers with automatic top-up or cargo release to manage price volatility.
• Independent inspection and SGS weight-ticket matching before each drawdown.
• Political-risk cover or export credit wraps where off-taker jurisdiction demands it.
• Lockbox sweep of receivables, giving lenders first call on proceeds before trader redistribution.

7 Why Financely

From 2020 to 2025 we placed USD 6.8 billion across oil, refined products, ferrous and non-ferrous metals. We declined USD 1.4 billion that failed title or KYC checks, which keeps our reputation tight and our spread inside market averages. Expect blunt talk and a lender bench that signs rather than stalls.

8 Get Started

Need structured finance that keeps the supply chain running when traditional trade lines dry up? Send lift schedule, storage map and buyer contracts. We respond inside forty-eight hours with a go-or-no-go and indicative pricing.

Figures and timelines reflect Financely Group commodity-finance desk transactions 2020-2025. Funding depends on diligence, market spreads and investor appetite.