What Soft Commodities Trade Finance Covers

This service addresses the credit side of physical soft commodities flows across sugar, coffee, cocoa, grains, oilseeds, rice, and related products. Facilities are structured around actual contracts, stock, and receivables, not generic export labels.

• Borrowing base and revolving facilities. Structures secured on a mix of warehouse receipts, in store stock, receivables, and, where relevant, margin deposits, with clear eligibility criteria and advance rates for each bucket.
• Pre export and prepayment finance. Facilities tied to forward sales, offtake contracts, and crop pre financing, including export account control, assignment of receivables, and risk sharing with local originators.
• Receivables and distribution finance. Programmes secured on short dated receivables to mills, roasters, crushers, refiners, and distributors in multiple jurisdictions, often combined with credit insurance.
• Warehouse and collateral management structures. CMA based inventory finance in third party or dedicated warehouses, including sugar, coffee, and cocoa stock in key ports and terminals.
• LC, SBLC, and guarantee backed trade facilities. Use of documentary LCs, UPAS LCs, and demand guarantees to support import of raw commodities and export of semi finished products, aligned with ISBP, UCP and standard documentary practices.
• Margin and basis risk integration. Treatment of futures margin, options premia, and basis movements within borrowing base and liquidity analysis so that lenders see how hedging interacts with collateral and cash.

Structures are shaped to the sponsor’s actual book and risk appetite rather than forced into one size fits all templates that ignore quality differentials or seasonal behaviour.

Engagement Scope & Deliverables

Each mandate is scoped around one borrower and a defined set of soft commodities flows. The output is a lender ready structure backed by numbers, documents, and a clear narrative.

• Flow and facility diagnostic. Initial review of trade flows, counterparties, seasonality, hedging, existing lines, and current collateral to map realistic facility options.
• Structuring memorandum. Detailed note recommending facility type, collateral pools, eligibility grids, advance rates, reserves, and covenant framework, tailored to the soft commodities book.
• Financial and borrowing base model. Integrated model capturing P&L, cash flow, working capital, and facility usage, including borrowing base mechanics, stress cases, and hedge margin impacts.
• Term sheet from sponsor side. Draft term sheet for borrowing base, pre export, or receivables facilities, with ranges for pricing, covenants, tenors, and security reflecting market conditions.
• Lender pack. Concise credit narrative that explains origins, destinations, counterparties, quality and grade mix, hedging framework, collateral, and structure in a format credit officers can process.
• Lender mapping and approach plan. Shortlist of banks and funds with appetite for soft commodities in the relevant regions and ticket sizes, with an agreed contact and sequencing plan.
• Support through indications and term sheets. Assistance during initial indication phase and commercial comments on key terms to keep structure consistent with the agreed credit story.

Legal drafting, tax work, and collateral manager selection are handled by specialist providers and external counsel, with FG Capital Advisors acting as the structuring and credit narrative anchor.

Frequently Asked Questions

Do you finance sugar, coffee, or other cargoes directly?
No. FG Capital Advisors does not fund trades or hold physical positions. The firm works on the sponsor side to structure facilities and prepare credit materials that banks and funds can work with.

Which soft commodities do you focus on?
Typical mandates involve sugar, coffee, cocoa, grains, oilseeds, rice, and derived products. The relevant point is not the commodity label by itself but the quality of flows, contracts, and risk management around those products.

Can you help with CMAs and warehouse structures?
Yes, at a commercial and structuring level. FG Capital Advisors helps define the role of collateral managers, reporting requirements, and control mechanics. The appointment and contracting of specific operators is handled with external legal and operational input.

Do you only work with international traders?
No. Regional and national traders, processors, and exporters are candidates where flows and counterparties are strong enough to interest international trade finance desks or specialist funds.

Will you approach lenders on our behalf?
Subject to regulation, conflicts, and engagement terms, FG Capital Advisors can support controlled approaches to banks and funds as part of a mandate. Broad, uncontrolled distribution of materials is avoided.

Can you work on variable or success fee only terms?
No. Advisory work on soft commodities trade finance is charged on a fee basis as described above. In some larger or long term relationships, variable elements may be added on top of a base fee, subject to regulation and agreement, but never in place of base advisory fees.