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Trade Finance

Warehouse Finance

Warehouse finance provides the trading company with the flexibility to take a period of extended credit undisclosed to the supplier, thus obtaining optimum payment terms and the ability to consolidate merchandise emanating from different suppliers.

FIMBank provides this form of finance, which can be arranged where payment for the purchased goods is made via a documentary credit and / or a documentary collection and / or a confirmed purchase order. It is common for the underlying transaction to be settled on a 'sight' basis, with the supplier with the goods being consigned to the order or in the name of FIMBank. This allows the trading company to negotiate better terms with the supplier, and allows it more time to sell the goods and realise the proceeds deriving from the receivables.

When the goods are consigned to the order of or in the name of FIMBank, they can be warehoused in FIMBank's name for an agreed period, and may be drawn partially or fully by the trading company. This may be against cash payment or alternatively against substitute documentation required under an inward receivable (e.g. letter of credit or documentary collection) covering the shipment of goods to the end user. When immediate possession of the goods is required e.g. to fulfil orders already received, the goods may be released to the importer 'in trust' for an agreed period, at the end of which payment would be required. In either case, the agreed period would take into account  the trading company's usual terms of trade, and would commence from the date of the bank's payment in settlement of the underlying transaction.

FIMBank is in a position to provide these facilities in all major currencies, combined with the necessary currency hedging techniques and variable interest linked to the base rate for the currency. FIMBank can arrange for finance of between 60 to 80% of the cost of goods, preferably via an irrevocable letter of credit, although small amounts in advance payments may also be considered on a case by case basis. Certain criteria, such as goods standing of counter parties, assignment of inward receivables, appropriate insurance cover, nature of merchandise, the possibility of having Collateral Management Structures (CMA) / Stock Monitoring Agreements, and workable time frames and delivery dates, must be in place.

For further details, call our Trade Finance team on +356 21322100 or send us an email