Reg D 506(c) Trade Finance Fund — Short-Duration, Self-Liquidating USD Receivables

Disclosure. For US accredited investors only under Reg D 506(c). This page is informational and not an offer. Any commitment requires accreditation verification, KYC/AML, and execution of definitive documents. Targets are estimates. Capital is at risk.

Reg D 506(c) Trade Finance Fund — Short-Duration, Self-Liquidating USD Receivables

We finance real-world trade flows with short-tenor, self-liquidating instruments. Think confirmed LCs, insured receivables, and payables programs tied to strong obligors. First-lien controls. Documented cash flow. Monthly USD distributions. No fairy tales — just paper that pays down.

Target net yield: 7–10% p.a. (policy, not guaranteed) Typical tenor: 30–180 days Currency: USD only

1. Snapshot

Item Outline
Vehicle Private LP/LLC; SPV sleeves per pool. Reg D 506(c); verified accredited investors only.
Strategy Purchase/discount self-liquidating receivables; finance confirmed letters of credit (incl. UPAS); payables/supply-chain programs with anchor obligors.
Security Package Assignment of proceeds, LC confirmation, credit insurance, UCC filings, cash dominion/blocked accounts, collateral manager where relevant.
Duration Short cycle — weighted average life typically 3–6 months, continuous recycling.
Minimum Typically $250k+; larger tickets prioritised.
Liquidity Monthly or quarterly windows with notice; gates may apply in stress to protect the pool.
Fees Management fee plus performance over investor preferred return; full schedule in the PPM.
Reporting Monthly statements; annual audit; K-1 if LP/LLC structure.
Key Risks Counterparty default, documentary disputes, country risk, insurance exclusions, fraud. We mitigate — they don’t disappear.

2. What We Finance

Bucket Instrument Typical Controls
Post-shipment receivables Invoice discounting to creditworthy buyers Assignment of receivables, notice to debtor, TCI (trade credit insurance), blocked account
Confirmed LCs Sight/usance LCs (incl. UPAS) OECD bank confirmation, document checking, reimbursement undertaking
Collections with bank aval D/A, D/P with aval or bank guarantee Bank aval, bill of exchange endorsed, title control until payment
Payables finance Supplier early-pay against anchor approvals Irrevocable payment undertakings from anchor; platform-based confirmations
Pre-export (select) Advance vs offtake + WR/CM Warehouse receipts, collateral manager, insured logistics, assignment of offtake

3. Risk Stack & Mitigants

  • Buyer/bank risk: Focus on investment-grade banks and stronger corporate obligors; confirmations or insurance where needed.
  • Performance risk: Prefer post-shipment paper; for pre-export, use WR/CM and staged drawdowns.
  • Country/political: Short tenors, diversified flows, optional PRI or ECA cover.
  • Fraud/documents: Independent document check, title control, dual approvals, platform logs.
  • Cash control: Collections through blocked/controlled accounts; no free-floating cash.
  • Concentration: Caps by obligor, sector, country, tenor, and instrument type.

4. Cash Flow Mechanics

Step 1 — Buy/finance the paper.

Fund against eligible shipments or approved invoices with hard controls in place.

Step 2 — Monitor and collect.

Documents validated, shipment tracked, collections routed to controlled account. Exceptions escalated fast.

Step 3 — Recycle and distribute.

As paper matures (30–180 days), principal is recycled into new flow; net income paid out monthly in USD after reserves and fees.

5. Waterfall (Plain English)

  • Servicing/admin costs
  • Fund expenses
  • Management fee
  • Reserve buffer (1–2 months of payouts)
  • Investor preferred return (monthly)
  • GP performance over the pref

6. What We Don’t Touch

  • Unverified counterparties or “story” credit.
  • Unconfirmed LCs from weak/opaque banks.
  • Pre-shipment with no title control or offtake.
  • Sanctioned parties, restricted goods, or messy end-use.

7. Eligibility & Process

  • Who can invest: US accredited investors only (Reg D 506(c)); verification required.
  • Steps: Confirm accreditation → receive PPM and subscription docs → fund on call date → monthly USD distributions after first accrual.
  • Reporting: Monthly statements; K-1 annually if LP/LLC structure.

Want monthly USD income backed by short-tenor, self-liquidating trade paper? Request the investor pack (PPM, sample loan tape, controls checklist).

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Disclaimers

  • Not an offer or solicitation. Any offer is made only through definitive documents.
  • Targets are estimates, not guarantees. You can lose capital.
  • Liquidity is periodic and may be gated to protect the pool.