Things You Can’t Miss About Trade Finance & Trade Finance Providers

With the option of trade finance, it has become possible for businesses of any scale to make their import and export transactions a reality by offering them the right finance solutions to take care of the same. 

 

It goes without saying that the smaller a business is in its operations, the more is their requirement for finance to help them take their business to the next level. In such scenarios, trade finance providers act as intermediaries between the buyer and the seller to ensure that transactions do not go on hold because of a shortage of funds. In fact, trade finance and its availability have led to a huge growth in international trading. 

 

With these things in mind, it’s also important to remember a few more things about trade finance. 

 

1- It Reduces the Burden on Both- Importers and Exporters

 

Economies all over the world have witnessed significantly higher growth because of trade finance and trade finance providers. For importers, they are stress-free that the items they have received have been completely verified through the financers, while the exporters don’t fret over the importers in case there is a payment default. 

 

2- Trade Finance Helps in Payment Risk Reduction

 

During the early days of international trade, there was no surety on the exporters’ part that they would even be receiving the payment from importers for the transaction. Over the course of time, exporters started looking for avenues that could help reduce the chances of non-payment for their sale of goods or services. 

 

Advancements in global trade technology and trade finance have led to payment acceleration to exporters, while also assuring the importers that the goods ordered have actually been shipped to reach them. 

 

3- Trade Finance Factoring

 

Factoring has become a pretty common method of boosting their cash flow. An exporter sells all his open invoices to trade finance providers at a discount. Then the factor waits until the final payment is made by the importer. It relaxes the exporter by reducing the chances of bad debts while also providing the working capital so that the operations stay smooth. 

 

Many trade finance software solutions have also made their way into the market to assist with trade finance and its other details. 

 

4- Trade Finance Services and Products

 

Trade finance document automation, or even its traditional counterpart, deals with many common products and services related to different companies and transactions:

 

– Bank Guarantee

If an importer or exporter fails to comply with the terms and conditions of the entered contract, then the bank acts as a guarantor against such a situation. 

 

– Letter of Credit

A letter of credit is a promise on behalf of the importer’s bank that states that the moment an exporter makes all the shipping documents available as per the purchaser’s agreement, the bank will release the payment to the exporter immediately.

 

If you are looking for trade finance document automation or something on similar lines, then you should try considering Trade Technologies for the same. 

 

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