Finance to Support Your Trade Activities
Importing and exporting goods can create significant cash-flow requirements. Businesses may need to finance purchases before receiving payment from customers, provide guarantees to counterparties, manage documentary transactions or bridge the gap between supplier payments and customer receipts. Trade finance can provide structured solutions for these requirements, subject to the applicable financial institution’s criteria. Prime Trust helps businesses understand potential trade finance structures and navigate the banking process.
Trade Finance Solutions
Who Is It For?
Supporting Your Business Cash Flow
Trade finance can potentially help businesses:
- Finance eligible imports
- Support export transactions
- Manage supplier payment requirements
- Bridge working-capital gaps
- Manage receivables
- Support contractual obligations
- Provide payment/transaction security
- Improve cash-flow management
From Purchase Order to Customer Payment
Purchase / Sales Order
A business receives or issues an eligible commercial order.
Supplier / Customer Terms
Payment terms and transaction requirements are established.
Trade Finance Requirement
The business identifies the funding, guarantee or payment facility required.
Bank Assessment
The relevant financial institution reviews the business and transaction.
Facility / Instrument
Subject to approval, the relevant trade finance facility or instrument is established.
Transaction & Settlement
The transaction proceeds according to the agreed terms.
Trade Finance Eligibility Considerations
Financial institutions may consider factors such as:
- Business operating history
- Nature of the business
- Import/export activity
- Trading volumes
- Financial performance
- Banking history
- Existing facilities
- Customer and supplier relationships
- Countries involved in transactions
- Goods/products being traded
- Transaction structure
- Payment terms
- Credit profile
- Source of funds
- Compliance and KYC requirements
Trade Finance Documentation
Depending on the facility and transaction, documents may include:
Corporate Documents
- Trade licence
- Certificate of incorporation
- Memorandum & Articles of Association
- Shareholding information
- Company profile
Financial Documents
- Bank statements
- Financial statements
- Management accounts
- VAT returns, where applicable
- Existing facility information
Trade Documents
- Purchase orders
- Sales orders
- Commercial invoices
- Proforma invoices
- Supplier information
- Customer information
- Contracts
- Shipping documents, where applicable
- Import/export documentation, where applicable
Shareholder / Management Documents
- Passport copies
- Emirates ID, where applicable
- Residency documents, where applicable
- Additional KYC information, where required
Navigating Complex Trade Transactions
Businesses may encounter challenges such as:
- Large supplier payment requirements
- Long customer credit periods
- Cash-flow gaps between purchase and payment
- International counterparties
- Complex transaction structures
- Documentation requirements
- Country-related considerations
- Currency exposure
- Existing banking limits
- Additional compliance requirements
Prime Trust helps clients understand these requirements and prepare their applications and supporting information more effectively.
Professional Trade Finance Guidance
Prime Trust provides:
Frequently Asked Questions
Trade finance refers to financial products and banking facilities that can support eligible commercial and international trade transactions, including payment, financing and guarantee requirements.
Eligible importers, exporters, trading companies, distributors, manufacturers and other businesses involved in qualifying commercial transactions may explore trade finance solutions.
A Letter of Credit is a bank-issued payment mechanism used in eligible trade transactions under specified terms and conditions.
A Bank Guarantee is a commitment issued by a financial institution on behalf of a customer in favour of an eligible beneficiary, subject to the applicable terms.
Certain trade finance facilities can support eligible trade-related working-capital requirements.
Potentially, but eligibility depends on the business profile, transaction, financial information, banking relationship and financial institution criteria.
There is no universal amount. The potential facility depends on factors including business performance, transaction value, financial position, existing facilities and the financial institution’s assessment.
Timelines vary depending on the facility, transaction complexity, documentation and financial institution.