Usance LC Refinancing Case Study Germany Solar

Trade Finance Case Study

Usance LC Refinancing For Solar Imports Into Germany

A Hamburg-based solar importer sourcing photovoltaic modules and inverters from China was scaling quickly across utility and commercial projects in Germany. Supplier contracts were structured on 120-day usance letters of credit, but shipment volumes increased faster than internal working capital. Accepted LC maturities started to cluster in the same quarter, creating a payment concentration risk.

Financely arranged a refinancing structure that took out accepted usance LC obligations at maturity and spread repayment against the importer’s receivables cycle.

The result was continuity of imports, lower cash stress at maturity dates, and cleaner liquidity planning during peak delivery months.

Transaction Snapshot

Item Case Facts
Buyer Location Hamburg, Germany
Supply Corridor China to Germany (containerized solar equipment imports)
Primary Instrument Usance LC at 120 days
Core Issue Maturity concentration and working capital compression
Financing Solution Post-maturity refinancing line tied to accepted LC obligations
Risk Controls Receivables assignment, inventory visibility, and controlled cash collections

Why The Structure Was Needed

The client’s commercial model was healthy, yet the cash conversion cycle did not match the LC maturity profile. EPC and distributor customers were paying on agreed credit terms, while bank obligations under accepted usance LCs were due on fixed dates. Without refinancing, the importer would have needed to reduce shipment cadence and risk supplier allocations in a competitive market.

How We Structured The Refinancing

Maturity Take-Out Logic

We structured a refinancing line that settled accepted LC maturities and converted them into a managed short-term repayment schedule aligned with collections.

Eligibility Framework

Draws were linked to eligible trade flows, invoice quality, and shipment evidence to keep borrowing discipline and auditability.

Control Package

The stack included receivables assignment and cash-flow controls, giving capital providers clear visibility on repayment sources.

Execution Coordination

We coordinated importer, financing counterparties, and bank process steps to prevent payment date slippage at LC maturity.

Practical point: usance LC issuance alone does not solve liquidity timing. The key is the take-out plan at maturity, documented before volume ramps.

Outcome

The importer maintained shipment continuity, avoided maturity bottlenecks, and improved predictability in procurement planning. Vendor confidence stayed intact, and the company preserved growth momentum in the German solar pipeline.

For teams building similar corridors, this case mirrors the execution model used in our transaction flow on How It Works , with mandate scope detailed on What We Do.

Client Review

★★★★★

“Our issue was not demand. It was maturity timing on multiple usance LCs while project receivables were still collecting. Financely built a refinancing path that matched our operating cycle and removed immediate pressure at maturity dates.

The team was rigorous on documentation and clear on structure boundaries. We knew exactly what had to be delivered and why. That discipline helped us keep imports flowing and protect supplier relationships.”

Finance Director, Solar Import And Distribution Group, Germany

Disclaimers

  1. Counterparty names and selected transaction details are withheld for confidentiality and compliance reasons.
  2. Terms are summarized for case-study purposes and do not represent a public offer.
  3. This content is informational only and is not legal, tax, accounting, or investment advice.
  4. Financely provides best-efforts advisory and placement support. Funding and approvals remain subject to underwriting and third-party decisions.
  5. Past transactions do not guarantee future outcomes. Each deal is assessed on its own risk, documentation quality, and market conditions.

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