Trade Finance Services: Debt, Equity & Credit Enhancement Solutions
Trade Finance Services for Companies and Investors
What Is Trade Finance
Trade finance is a category of short-term credit products used to finance the movement of goods and services. These exposures are self liquidating. They are repaid through receivable collections, letter of credit settlements, or sale proceeds of controlled inventory. Structures are backed by documents such as bills of lading, invoices, inspection certificates, and insurance policies.
Why Trade Finance Matters
Exporters and importers face long working capital cycles. Goods must be shipped before payments arrive. Suppliers often demand deposits. Buyers require extended terms. Trade finance solves these gaps by injecting capital at shipment or production stage and ensuring repayment on delivery or collection. Without access to trade finance, contracts are delayed, supply chains weaken, and exporters lose competitiveness.
For investors, trade finance is a private credit allocation with short maturities and defined repayment sources. Institutional investors increasingly allocate capital to insured receivables, confirmed letters of credit, and structured commodity trade flows to achieve steady returns.
Types of Trade Finance Services
Issued under UCP 600, these instruments guarantee payment when compliant documents are presented. They reduce counterparty risk and enable trust between buyer and seller.
Used as credit enhancement. A standby letter of credit or demand guarantee ensures performance or repayment in case of default.
Factoring, discounting, or securitization of accounts receivable. Liquidity is provided against invoices while investors rely on insured repayment streams.
Facilities sized to eligible accounts receivable and inventory. Monthly reporting and eligibility criteria govern advance rates and availability.
Goods at port or warehouse are sold to a financier with a repurchase agreement. Collateral managers control title and investors fund against net orderly liquidation value.
Funding advanced against confirmed offtake contracts. Proceeds of exports repay the facility. Common in commodities such as oil, metals, and agriculture.
How Trade Finance Transactions Are Structured
Financely works under two types of mandates. A best efforts mandate means we structure the deal, prepare materials, and present it to investors but cannot guarantee capital will be raised. Outcome depends on sponsor equity, collateral eligibility, and investor appetite. A firm commitment mandate involves an underwriting partner that uses its balance sheet to guarantee placement subject to due diligence and higher fees.
All distribution is handled by regulated chaperones. Financely focuses on structuring, underwriting, and preparing the transactions so they can be presented in a compliant and standardized format to institutional investors.
Who Provides Trade Finance
Banks are traditional providers of letters of credit and short term trade loans. Basel capital requirements and balance sheet limits reduce their appetite for mid market transactions. Private credit funds and institutional investors fill the gap by purchasing insured receivables, discounting LCs, and providing revolving facilities. Insurance companies play a critical role by covering credit and political risks, making non bank participation possible.
Trade Finance Across Sectors
- Commodity Trading: Pre export, repo, and borrowing base structures secure flows in oil, metals, and agriculture.
- Manufacturing: Export receivables and confirmed orders financed through discounting and forfaiting.
- Import and Distribution: LC confirmations and insured open account terms support supply chains.
- Infrastructure Sponsors: Short term working capital bridged to longer project finance structures.
- Emerging Markets: Trade credit insurance allows capital into jurisdictions where banks are constrained.
Risks and Controls in Trade Finance
Trade finance faces risks including counterparty default, performance risk, collateral value fluctuation, and political interference. Controls mitigate these risks. Banks and investors require insurance, escrow accounts, collateral management, eligibility rules, and covenants. Pricing reflects the tenor, quality of counterparties, and strength of controls.
Why Some Transactions Fail
Not all deals succeed. Common reasons include insufficient sponsor equity, weak documentation, unrealistic return expectations, encumbered collateral, or regulatory issues. Financely works in good faith on every mandate but investor commitments depend on these fundamentals being in place.
Frequently Asked Questions
What is the difference between trade finance and supply chain finance?
Trade finance funds specific import and export flows, secured by goods and receivables. Supply chain finance is typically buyer led and focuses on extending supplier terms through factoring or discounting.
How long does it take to secure trade finance?
Depending on structure and documentation, transactions may close in 4 to 10 weeks. LC confirmations can be faster while borrowing base facilities require audits and eligibility testing.
What collateral is accepted?
Accounts receivable, confirmed orders, inventory under collateral management, and export contracts. Sponsor equity is always expected to align incentives.
Can SMEs access trade finance?
Yes, but typically with credit insurance or guarantees to support investor confidence. Smaller ticket sizes are often financed through receivables discounting platforms.
What is the difference between best efforts and firm commitment?
A best efforts mandate means Financely prepares and distributes the deal without guaranteeing funds. A firm commitment mandate involves an underwriting partner that commits capital subject to diligence and fees.
Borrowers: Request Structured Trade Finance
Importers, exporters, and commodity traders can access working capital through structured facilities. Submit your contracts and requirements for review.
Start Client IntakeInvestors: Participate in Trade Finance
Gain exposure to insured receivables and short dated trade flows. Financely structures vehicles where institutional and accredited investors can target steady returns with strong controls.
Review the Investment VehicleFinancely provides advisory, underwriting, and arrangement services through regulated partners. Financely is not a bank and does not issue letters of credit or loans. All transactions are subject to due diligence, investor approval, and documentation.
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.
