Trade Finance Solutions
Are you in business? Get that much needed competitive edge, improved liquidity and cash flow whilst mitigating inherent risks associated with local and international transactions through our trade finance solutions.
HF Trade finance solutions include;
Guarantees and Bonds
- This is a unilateral contract between a bank as guarantor and a beneficiary as warrantee, in which the bank undertakes to make payment to the beneficiary within limits of a stated sum of money if a third party fails to perform an obligation or another event materialize or fails to materialize.
- Types of Guarantee/Bond
- Bid Bond
- Performance Bond
- Advance Payment Guarantee
- Retention Bond
- Payment Guarantee
- Immigration Guarantee
- Shipping Guarantees
- Customs/Transit Bond
- Security Bond
- Credit/Facility Guarantee
Letters of Credit
- This is a conditional undertaking by a bank on behalf of the buyer (applicant) that payment will be made to the seller (beneficiary) provided that the terms and conditions have been met, as verified through the presentation of all required documents.
- Types of Letters of Credit
- Import Letters of Credit
- Export Letters of Credit
- Transferable Letters of Credit
- Back-to-Back Letter of Credit
- Standby Letters of Credit
- This is a transaction whereby the seller entrusts the collection of payment to the remitting bank (mostly seller’s bank), which sends documents to a collecting bank (mostly buyer’s bank), along with instructions for payment.
- This is whereby the bank avalises or substitutes the bank’s risk for the importer’s/buyer’s risk thus providing the exporter/seller with assurance that payment will be met. This bill can subsequently be discounted or used to negotiate better credit terms and enhance the trading relationship with the buyer.
Contract Finance/LPO Finance
- The product offers credit facilities to finance local purchase orders or contracts involving the supply or delivery of goods or services.
- This product offers to finance receivables from reliable parties acceptable to the bank following performance of contracts.
- Pre Shipment Finance is issued by a financial institution when the seller wants the payment of the goods before shipment or wants to finance the purchase of raw material or components relating to an order.
- Post Shipment Finance is a kind of loan provided by a financial institution to an exporter or seller against a shipment that has already been made. This type of export finance is granted from the date of extending the credit after shipment of the goods to the realization date of the exporter proceeds.
- This is a solution that allows suppliers of the anchor access funds earlier than the agreed period with the anchor. Also called payables finance or reverse factoring.
- This is a solution that allows distributors of the products of the anchor to access products on credit and in larger volumes.
Structured Trade and Commodity Finance
- Structured Trade Finance is the means through which capital solutions (both funded and non-funded) are provided outside the traditional fall back on securities – the focus shifts from the “strength” of the borrower to the underlying cash flow and structures that enhance safe financing. It entails lending where intention is to get repaid by liquidation of flow of commodities. The transactions revolve around identifying and mitigating risks associated with the transaction.