Our Solutions
Our Solutions
Trade Financing
If you are a small business engaging in international trade or a larger corporation looking to optimize your global supply chain, trade financing offers a range of solutions to support your trade activities. Trade financing encompasses various financial instruments and services designed to facilitate and mitigate the risks associated with domestic and international trade transactions.
Trade financing can provide you with the necessary capital, working capital solutions, and risk management tools to navigate the complexities of the global marketplace. It enables businesses to seize new trade opportunities, bridge cash flow gaps, manage inventory, and establish stronger relationships with suppliers and buyers worldwide.
Why Trade Financing?
Trade financing works by providing businesses with the necessary capital, financial instruments, and services to facilitate and manage their trade activities.
How does it work?
To obtain a loan based on your assets, the following steps need to be taken in consideration:
- 1. Trade Transaction Initiation: The trade financing process begins when a buyer and seller agree to engage in a trade transaction. This could involve the sale and purchase of goods, services, or commodities.
- 2. Financing Needs Assessment: The business in need of trade financing assesses its specific financing requirements. This includes evaluating factors such as the cost of goods, production or sourcing timelines, payment terms, and potential risks associated with the trade transaction.
- 3. Selection of Trade Financing Solutions: Based on the assessed needs, the business explores various trade financing options available. These options may include letters of credit, trade credit insurance, export financing, supply chain financing, or other relevant financial instruments and services.
- 4. Application and Approval: After the assessment, the business applies for the chosen trade financing solution with a financial institution or trade financing provider, who will conduct a due diligence process and asset the risks associated with the trade transaction.
- 5. Financing Agreement and Terms: If approved, the financing provider and the business enter into a financing agreement. This agreement outlines the terms, conditions, fees, interest rates, repayment schedules, and any collateral or guarantees required.
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TRADE FINANCING
FAQ
Trade financing offers several benefits, including improved cash flow, increased purchasing power, risk mitigation, access to new markets, enhanced supplier relationships, and streamlined trade operations. It allows businesses to capitalize on trade opportunities and navigate the complexities of the global marketplace.
Trade financing is relevant for various businesses involved in trade, including importers, exporters, manufacturers, distributors, wholesalers, and traders. It caters to businesses of all sizes, from small and medium enterprises (SMEs) to large corporations, operating in diverse industries.
Trade financing solutions include letters of credit (LCs), trade credit insurance, export financing, supply chain financing, documentary collections, and risk mitigation tools. These solutions address different aspects of trade, such as payment security, working capital support, risk management, and liquidity optimization.
Trade credit insurance protects businesses against the risk of non-payment by their buyers. It provides coverage for losses resulting from customer insolvency, protracted default, political events, and other unforeseen circumstances. In the event of non-payment, the insurance policy compensates the insured business for the covered amount.
Yes, trade financing can be used for both domestic and international trade transactions. It assists businesses in managing the financial aspects of their trade activities, regardless of whether they involve local suppliers and buyers or cross-border transactions.
Letters of credit are widely used in international trade. They provide a guarantee of payment to the seller (exporter) by the buyer’s (importer’s) bank. The bank issues an LC, assuring the seller that they will be paid upon meeting the specified conditions outlined in the LC, such as presenting compliant shipping documents.
The timeframe for securing trade financing depends on various factors, including the complexity of the transaction, the due diligence process, and the specific requirements of the financing provider. Simple trade financing arrangements can be completed within a few days, while more complex transactions may take longer.
Why Amrock Financial?
AmRock Financial hasprovided $1 billion + in financing to more than 400+ small and mid-sized businesses in the US and Canada over the last 16 years, working with a pre-approved network of 1700+banks and Non-bank lenders nationwide.
If you are looking for a business loan, refinancing, or additional working capital, we provide Debt Structures from $1 million to $100 million.
Although banks have reduced lending in today’s market there are many other funding options available to you.
If you’re interested in scheduling a 30 min introductory call, book a meeting here:
Overview of our
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Trade financing can provide you with the necessary working capital solutions, and risk management tools to navigate the complexities of the global marketplace.
- 1001 Brickell Bay Drive 27th Floor Miami, Florida 33131
- 305-440-8480
- applications@amrockfinancial.com