Structured Trade Finance Procedure: From Origination to Funding
Structured Trade Finance Procedure: From Origination to Funding
A robust structured trade finance procedure ensures every deal is bankable, compliant and executed on time. Below is the end-to-end workflow—covering origination, due diligence, documentation, risk mitigation, and final funding.
1. Deal Origination & Application
Everything begins with identifying the client’s needs: pre-export financing, letters of credit (LC), inventory financing or receivables lines. We gather:
- Transaction details: commodity type, volumes, pricing terms
- Counterparty information: buyers, sellers, banks involved
- Shipping and delivery terms: Incoterms, vessel schedules
- Preliminary collateral and guarantee structure
2. Preliminary Structuring & Credit Approval
Our structuring team designs the capital stack and negotiates key commercial terms:
- Instrument selection: LC vs. confirmed LC, standby LC, BG
- Coverage ratios and advance rates (e.g., 80% of invoice)
- Pricing and margin grid based on tenor and risk
- Internal credit committee review and conditional approval
3. Due Diligence & Compliance
3.1 KYC / AML / Sanctions Screening
We vet all parties—sellers, buyers, freight forwarders—against global watchlists and perform enhanced due diligence on ultimate beneficial owners.
3.2 Commercial Due Diligence
Confirm contract authenticity, pricing fairness, commodity quality (CIQ reports) and shipping documentation (charter parties, bills of lading).
3.3 Legal & Regulatory Checks
Review of sale/purchase agreements, offtake contracts, LC text compliance with UCP 600, URDG 758 or ISP98 for demand guarantees.
4. Documentation & Structuring Safeguards
- Letter of Credit: Draft and negotiate LC terms—partial shipments, multiple drawings, confirmation instructions.
- Standby LC / Bank Guarantee: As credit enhancement or payment fallback.
- Assignment of Proceeds: To secure receivable financing or warehouse lines.
- Insurance & Credit Cover: Marine cargo insurance, credit insurance, ECA cover where applicable.
- Warehouse Receipts: For inventory financing, with third-party vault control agreements.
5. Risk Mitigation & Bankability
To make the deal bankable, we embed multiple layers of safeguards:
- Confirming Bank: Top-tier bank confirmation to eliminate country risk.
- Insurance Backstop: Comprehensive marine and credit insurance policies.
- Compliance Certification: Independent compliance and inspection reports.
- Performance Guarantees: Supplier performance bonds or corporate guarantees.
- Monitoring Controls: Digitally track shipments, warehouse stock and payment milestones.
6. Drawdown & Funding
Once documents comply, the bank releases funds:
- Presentation of compliant shipping docs (BL, CIQ, invoice, packing list).
- Bank scrutiny under UCP/URDG standards; any discrepancies corrected.
- Immediate disbursement to seller or warehouse operator.
- Ongoing interest accrual, collateral monitoring and covenant reporting.
7. Post-Funding Monitoring & Reporting
After funding, we remain engaged:
- Monthly compliance review: KYC refresh, sanctions checks
- Shipment tracking and inventory audits
- Quarterly covenant compliance and portfolio review
- Preparation for roll-over or exit financing if required
Ready to navigate the full structured trade finance procedure —from origination through to funding—with institutional rigor? Contact us today and receive your onboarding link within 24 hours.
Get Started With Us
Submit Your Deal & Receive a Proposal Within 1-3 Working Days
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.
All submissions are
promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.
Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.
Trade Finance
Tap into solutions like letters of credit, bank guarantees, and payment facilitation. We address the challenge of global transaction risk through structured strategies that foster cross-border growth. Complete the form to unlock streamlined funding aligned with your commercial objectives.
Submit a RequestProject Finance
Access non-recourse funding for infrastructure, renewable energy, or other capital-intensive ventures. We mitigate capital constraints by isolating project assets and focusing on risk management. Provide your details to receive a structure that drives growth and maximizes returns.
Submit a RequestAcquisitions
Secure financing for business or real estate acquisitions. We ease transaction hurdles by reviewing cash flow, synergy opportunities, and exit plans. Complete the form for a customized proposal that supports your strategic investment objectives.
Submit a RequestFor Banks
Financely assists banks facing Basel III pressures by distributing trade finance deals and providing collateral for letters of credit. We reduce capital burdens while preserving client relationships and fostering service expansion. Submit your request to optimize your trade finance offerings.
Submit a RequestOnce we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.
Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.
