Amounts: Typically for large amounts in excess of +- R 2,5 million

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Speed of Funding: a few weeks

Terms: generally facility based

Repayments: monthly

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Interest Rates: Dependant on risk profile


What is Trade Finance?

Trade Finance is the finance of international and domestic trade transactions. It is generally used to secure inventory (stock) or raw material.

  • Is designed specifically to help mitigate the risk between seller (exporter) and buyer (importer) 

  • The purchaser wants to reduce risk by knowing exactly what has been shipped

  • The seller wants to know that the buyer will pay

Finance Houses assist by providing support to both parties. For example, the importer's financier could provide a letter of credit to the exporter (or the exporter's bank) guaranteeing payment upon presentation of certain documents, such as a bill of loading.

 
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ADVANTAGES

  • Offers protection to the seller and the buyer

  • Preserves the buyers normal payment credit terms and does not burden the importer's balance sheet

Disadvantages

  • It’s generally only available on trades in excess of +- R 3 million