The term trade finance simply means securing a trade by way of issuing guarantees and in broader sense it typically relates to an international trade, which in turn refers to the payment assuance provided to suppliers for purchasing of commodities or goods or services and import and export of commodities or goods or services from one country to another country.
So, for a trade to happen, generally three parties are required: a seller/exporter to sell the goods; a buyer/importer to buy the goods and a financier such as a bank or a financial institution who can facilitate/complete the Trade by issuing the guarantee for the trade to happen.
Trade finance are done in an indirect way i.e. by issuing an acceptable financial/payment guarantees to the seller/exporter like letters of credit, standby letters of credit, letters of guarantees etc.etc.
Trade finance consultancy
Trade finance consultancy is very useful for a customer who regularly uses aforementioned facilities for his importation of goods. Using this service, an importer can get huge benefits and can save huge sums of money plus time. The advantages are:
• Advice on cost effective solution for their importation.
• Drafting of instruments on their behalf such as LC/BG/SBLC etc.
• Benefits of importing on deferred term rather than immediate payment term.