Domestic Trade Financing

 

• Our financing solutions are not just limited to the international import and export market.

• We can offer a wide variety of trade finance solutions within a defined boundary.
  The principles remain the same as well as the application process. 

• Many businesses with an annual sales volume between Five Hundred Thousand ($500,000) Dollars and One Hundred Fifty Million ($150,000,000) Dollars face hardship in securing financing.

• Most large financial institutions do not extend meaningful loans or credit to businesses of that size without significant equity in the business and strong personal guaranties of the principals.

• The Accounts Receivable of small businesses are traditionally due thirty to sixty days after invoicing.

• These businesses, in many cases, cannot afford to wait for payment since overhead expenses such as payroll, rent and taxes must be paid on a more frequent basis.

• Generally, such businesses have limited availability of credit with suppliers and often require additional funds for working capital to maintain the flow of goods and services. 

• Such short-term borrowing to facilitate growth or meet seasonal cash flow needs is usually not available from traditional sources.

• There is, therefore, a need for financial services to this generally ignored segment of the business community, specifically, the smaller companies that do not have access to traditional lending sources.

• As a result, we specialise in being the right lender in place for your "factoring", (purchasing of accounts receivable), which leads to growing your company and giving you cash that is needed.

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Pre-Import Capital Funding

 

Each deal requires a thorough understanding of the transaction and sufficient due diligence to mitigate the risk inherent in this type of trade financing.
 

Features

• Requires that an Irrevocable Documentary Letter of Credit be opened by a buyer in favor of beneficiary importer.

• Provides working capital to the L/C beneficiary to pay designated suppliers.

• Financing available in amounts from US $100,000 to $100,000,000.

• Loan repayment from funds generated through negotiated Letter of Credit.

• Loan amount covers cost to produce or purchase product - not profit margin

• Collateral normally only the Assignment of Proceeds of L/C and promissory note from the beneficiary.

• Financing ranges from a time up to 90 days.

• Funds disbursed to suppliers by wire transfer or Back to Back Letters of Credit.

• Support for single transactions or multiple sales under L/Cs.

• Preliminary commitment provided on standard L/C deals that meet basic parameters.

 

Asset Based Lines of Credit

 

Asset-based funding is an increasingly common financing strategy for businesses requiring borrowing flexibility to handle fluctuating capital needs.
 

• Large import orders require significant funds to pay overseas suppliers.

• Importers drop/distributors must often warehouse quantities of inventory to deliver on demand to their buyers. Import operations are commonly highly leveraged with irregular or seasonal cashflow.

• With these challenges’ Importers/wholesalers are usually hard pressed to obtain reliable, flexible cost-effective financing to support their operations.

• Importers/wholesalers are now recognizing Asset Based financing as an effective tool to finance imports by leveraging equity in current and fixed assets.

• Traditional Bank financing is based on a firm's cash flow and net equity.

• In contrast, Asset Based financing, provided by commercial finance companies, is structured to advance funds based on a percentage of the qualified firm's receivables, inventory and other assets.

• The value, quality and liquidity of the business assets determine the loan amount for which a business can qualify.

 

Because the loans are secured by assets, finance companies can lend to importer/wholesalers that experience irregular or seasonal cash flow requirements.

 

Inventory Financing

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• The Importer/Distributor commonly needs to maintain a complete stock of inventory to supply buyers as required. But large stock levels can easily tie up significant amounts of working capital. 

• As opposed to a traditional bank line of credit, which may take Inventory as backup collateral, asset-based inventory lenders considers inventory to be the primary source of repayment.

• The amount of credit extended under an asset-based inventory loan is explicitly linked to a formula based upon the type of inventory collateral and how quickly it can be sold. 

• A key benefit of asset-based inventory lending is that the common high leverage of Importer/Distributors is not necessarily a barrier to finance if the company's underlying inventory assets have sufficient liquidation value.

 

Thus, asset-based inventory lending is well suited to highly leveraged Importer/Distributors.

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