Professional Services. Page prepared September 2025. FG Capital Advisors acts as arranger and advisor via regulated partners.
Attracting Institutional Investors to Trade Finance
Position trade finance as a stable private-credit allocation. Focus on self-liquidating exposures, insured receivables, disciplined controls, and access to large corporate trade flows.
Why Trade Finance Works
Short tenors, defined cash conversion cycles, and documentary evidence create self-liquidating positions. Collections flow from contracted buyers through controlled accounts or LC settlement under UCP 600.
The Trade Finance Gap
Demand for working capital regularly outstrips bank capacity. Private credit can fund insured transactions and high-quality receivables where bank balance sheets are constrained.
Borrower Profile
Established trading companies with repeat lanes, credible counterparties, and tested controls. Annual turnover in the hundreds of millions and clear audit trails are common thresholds.
Risk Controls
Insurance on receivables, assignment of proceeds, lockbox or escrow, collateral management at port or warehouse, eligibility rules, and covenant packages anchored by data reporting.
Structures Investors Buy
Securitized pools of insured trade receivables, confirmed LC discounting, borrowing base revolving credit with AR and inventory, inventory repo with title transfer, and pre-export facilities.
Return and Liquidity
Predictable amortization from receivable settlement or LC payment. Laddered maturities help manage reinvestment. Yield reflects tenor, credit quality, insurance, and control strength.
| Investor and Lender Criteria | ||
|---|---|---|
| Dimension | What To Evidence | Why It Matters |
| Obligor Quality | Buyer ratings or scored credit files, sanctions and AML screens, historical DSO | Sets advance rates, tranche attachment points, and pricing |
| Documentation | UCP 600-compliant LCs, clean bills of lading, insurance certificates, assignment of proceeds | Supports self-liquidation and fast recoveries |
| Controls | Lockbox, escrow waterfalls, collateral management agreements, warehouse receipts | Protects collections and reduces loss severity |
| Diversification | Obligor caps, sector and country limits, tenor buckets | Stabilizes performance and reduces concentration risk |
| Reporting | Borrowing base certificates, AR aging, eligibility tests, covenant packages | Enables monitoring and early warning |
| Capital Structures For Trade Finance | |||
|---|---|---|---|
| Structure | Use Case | Repayment Source | Key Terms |
| Securitized Insured Receivables | Pool of short-dated AR with trade credit insurance | Collections from obligors or LC settlement | Senior and junior tranches, eligibility and concentration tests |
| Confirmed LC Discounting | Exporter accelerates cash on usance LCs | Confirming bank payment at maturity | Pricing by tenor, bank and country risk |
| Borrowing Base RCF | Working capital against eligible AR and inventory | Daily collections to a controlled account | AR advance up to 80% eligible, inventory up to 50% eligible |
| Inventory Repo | Title transfer on stock at port or warehouse | Sale proceeds or buy-back on exit | Advance vs NOLV, daily marks, CMA oversight |
Execution Path
Invest In Securitized, Insured Trade Receivables
We manage an institutional strategy investing in junior and senior tranches of securitized, insured trade receivables. Capital supports established trading companies with ≥ USD 500,000,000 annual turnover, a proven trade cycle, and documented controls. We fund insured transactions with vetted obligors and clear documentary flows. The objective is steady private-credit income with 6–8% net IRR targets and portfolio diversification. Current assets under management are approximately USD 800 million.
Review The Trade Finance VehicleDisclaimer. FG Capital Advisors provides advisory and arrangement services. Figures, targets, and examples are illustrative and subject to change after diligence and credit approval by relevant parties.
