Trade Finance Investing
Why Private Credit Funds Target Short-Term, Collateral-Backed Trade Deals
Trade finance investing isn’t about chasing volatility—it’s about short-term exposure to real-world transactions. These are asset-backed, insured, and structured for timely repayment. FG Capital Advisors provides accredited investors with access to this low-default, high-transparency asset class through our managed credit strategies.
What Is Trade Finance Investing?
This strategy involves lending against goods in transit—often pre-sold—using instruments like Letters of Credit, invoice factoring, and structured prepayments. Typical duration ranges from 30 to 180 days. Returns are driven by real settlement cycles, not market speculation.
Why Private Credit Funds Invest in Trade Finance
The yields are attractive, but the key advantage is risk control. Trade finance defaults average less than 1% annually, and credit is typically backed by collateral or insured. Banks have stepped back due to capital constraints under Basel III, creating opportunities for funds to step in and finance underserved trade corridors.
Exposure is short, exits are clear, and investors gain access to real supply chain-linked cash flows with professional oversight.
How FG Capital Structures Trade Finance Investments
Our Trade Finance Fund underwrites commodity and structured trade deals on behalf of LPs. All investments are short duration (typically under 6 months), asset-backed, and screened by our in-house underwriting team. We co-invest alongside our LPs to maintain alignment.
Each transaction is supported by enforceable legal frameworks, local enforcement capacity, and FX/credit insurance where applicable. Distributions are made monthly, with full fund administration and independent audits in place.
Start Allocating to Global Trade
Interested in stable, short-term returns from real-economy credit? Learn how our Trade Finance Fund connects accredited investors to bankable trade flows in emerging and developed markets.
Frequently Asked Questions
What’s the typical return profile?
Trade finance investments historically yield 6–8% net annually, with much lower volatility than public credit markets.
Are funds liquid?
This strategy is not publicly traded, but because positions are short-dated, capital is recycled regularly and can be distributed on a monthly basis.
Is there any equity exposure?
No. The fund is focused exclusively on debt linked to commodity and infrastructure trade. Every deal is underwritten for principal protection.
How are risks managed?
We use insured collateral, legal enforceability, and diversified exposure to minimize counterparty risk. FGCA also avoids unsecured lending.
