FIMBank - Structured Trade Finance

Structured trade finance is a type of debt finance that involves a variety of security instruments to finance the trade of commodities. It can involve all or part of the following financing stages:

Advance payment financing: This is a type of financing that is provided to the seller of commodities before the goods are shipped. This can be used to help the seller cover the costs of production or to finance the purchase of raw materials.
Pre-export financing: This is a type of financing that is provided to the seller of commodities before the goods are exported. This can be used to help the seller cover the costs of transporting the goods to the port of export or to finance the payment of import duties.
Warehouse financing: This is a type of financing that is provided to the owner of commodities that are stored in a warehouse. This can be used to help the owner cover the costs of storage or to finance the sale of the goods.
Transit and port financing: This is a type of financing that is provided to the owner of commodities that are in transit or that are stored in a port. This can be used to help the owner cover the costs of transportation or to finance the payment of port fees.
Bill of lading financing: This is a type of financing that is provided to the holder of a bill of lading. A bill of lading is a document that proves ownership of goods that are being transported. This type of financing can be used to help the holder of the bill of lading cover the costs of transportation or to finance the sale of the goods.
Inventory financing: This is a type of financing that is provided to the owner of commodities that are held in inventory. This can be used to help the owner cover the costs of storage or to finance the sale of the goods.
Receivables financing: This is a type of financing that is provided to the owner of accounts receivable. Accounts receivable are the amounts that customers owe to the seller of goods or services. This type of financing can be used to help the owner of the accounts receivable cover the costs of extending credit to customers or to finance the sale of the accounts receivable.

Structured trade finance can be used to finance a variety of commodities, including agricultural products, energy, metals, and minerals. It can also be used to finance the trade of manufactured goods.

The specific terms of a structured trade finance arrangement will vary depending on the specific needs of the borrower and the lender. However, all structured trade finance arrangements will involve some form of security, such as a bill of lading, warehouse receipt, or accounts receivable.

Structured trade finance can be a valuable tool for businesses that are involved in the trade of commodities. It can help businesses to finance their operations and to mitigate the risks associated with trade.