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TRADE FINANCE
allows a business to make a sale (either within the UK or overseas) which
may not otherwise be possible because of lack of capital or bank facilities.
TRADE FINANCE is very much based on a single
transaction, and frequently involves the purchase of goods (often from
overseas) which are pre-sold (with a confirmed order as evidence).
The trade financier can provide funds to enable the purchase to be made.
This is of benefit where the supplier will offer no (or only limited)
credit terms.
The trade financier can also help by advancing funds against the sales
invoice produced when the goods are finally delivered.
Recently ...
- A company supplying
computer hardware had the opportunity to supply a Government department
with £2m worth of equipment.
- The specific equipment
was sourced from the USA. The American supplier required payment
prior to the goods leaving the States. With the benefit of a trade
financier a Letter of Credit was opened to purchase the equipment.
- The equipment was
supplied to the Government department on 60 Day terms.
- The letter of credit
was due at the time of shipment, so the trade financier covers
the time gap involved between letter of credit and payment received
from the Government Department.
- The Government Department
actually took 81 days to pay from date of invoice
- After receiving
payment, the trade financier pays the margin to the client.
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Trade Finance can be very confusing; where used
correctly it can facilitate a profitable transaction. As a specialist
brokerage Factoring Partners has helped many businesses with their funding needs. Please call 01789
730137.
Factoring Partners, P.O. Box
1696, Stratford
upon Avon, Warwickshire CV37 0ZZ
Tel/Fax: 01789 730137, Mobile
07966 492154
email us
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