How does Trade Finance Servicing Work

Any particular company dealing in trade finance servicing, offers cash flow solutions for various business such as Asset based Lending, Invoice Finance, and Debt Factoring etc. Such trade finance servicing can work for larger companies as well who want to diversify their operations. The sole purpose of trade financing is to assist the companies and organizations who are involved in trade with finance facilities. Such services offer better negotiations with the markets and complete the deal with confidence in a professional manner.

A good trade financing organization first and foremost analyses the exact requirements of their client and tries to deal with the specific financial problem and cover all aspects of trade. Proper trade financing is like a tailor made solution which looks after all the requirements for your export. With a skilled and qualified trade finance team, the specific requirements of the client are looked after and then the correspondent banks are leveraged. Trade finance servicing also includes pre-shipment credit to its exporters by packing credit and giving them the opportunity to fund few operations such as import of raw goods, buying or raw material, packing the finished goods which are to be exported etc.

Few other trade finance services include:

Post-Shipment credit

Trade finance servicing includes post-shipment credit. This facility is given to the exporters and a good trade financing includes:

Discounting of the export papers under the order of the governing authority.

Providing advances to exports on the various consignments.

Providing advances for permitted exports

Offering the acceptance for all the documents for export in exchange of a letter of credit

Depending on the collection, advance being offered to the exporters for the export bills

Offering fund to exporters against the balance of the exports which is undrawn

The above mentioned operations are the main services of trade financing. Proper trade finance will help an organization carry on international trade smoothly and effectively.