Public Commentary: The content below describes FG Capital Advisors’ approach to trade-finance loans. It is provided for informational purposes only and does not constitute investment advice or a solicitation.
Trade Finance Loans – Working-Capital Facilities Explained
International trade often ties up cash in raw-material purchases, production, shipment, and receivables collection. Trade-finance loans convert these assets into short-term funds, helping companies maintain operations without tapping long-term credit lines or equity.
Core Facility Types
| Facility | Overview |
|---|---|
| Pre-Shipment Financing | Provides cash to purchase raw materials or finished goods before export. Tenor: 30–120 days. Advance: up to 85% of confirmed order value. |
| Post-Shipment Receivables Loan | Bridges the gap between shipment and buyer payment. Tenor: 30–150 days. Advance: up to 90% of invoice amount. |
| Inventory Finance | Leverages warehouse receipts or collateral-management agreements. Tenor: 30–180 days. Advance: 60–75% of net orderly-liquidation value. |
| Import Bridge Loan | Funds supplier payments on sight terms, repaid from inventory sales. Tenor: 45–180 days. Advance: up to 80% of CIF value. |
Key Eligibility & Collateral Criteria
- Financial History: Minimum three years of audited accounts or verifiable trade history.
- Trade Documentation: Purchase orders, sales contracts, letters of credit, or warehouse receipts.
- Counterparty Quality: Creditworthy buyers or suppliers, or confirmed LCs from investment-grade banks.
- Collateral Controls: Assignment of proceeds, control accounts, or third-party collateral management.
- Regulatory Compliance: AML/KYC clearance and no sanctions exposure.
Indicative Pricing & Fee Structure
| Facility | Cost (SOFR + Margin) | Typical Fees |
|---|---|---|
| Pre-Shipment Financing | + 450–650 bps | Arrangement: 0.75–1.25% |
| Post-Shipment Receivables | + 425–625 bps | Arrangement: 0.75–1.25% |
| Inventory Finance | + 475–700 bps | Collateral-monitoring: pass-through |
| Import Bridge Loan | + 500–750 bps | Origination: 1.0–2.0% |
Typical Execution Timeline (15–30 Days)
Day 1–3 | Pre-Screening
– Provide financials, trade docs, KYC.
Day 4–7 | Indicative Terms
– Term sheet issued and accepted.
Day 8–15 | Due Diligence
– Collateral audit, counterparty checks, draft agreements.
Day 16–22 | Credit Approval
– Lender committee sign-off; CP list finalised.
Day 23–30 | Funding
– Documents executed; funds released or LC refinanced.
Critical Success Factors
- Document Accuracy: Precise invoices, contracts, and shipping papers speed review.
- Visibility: Inspection reports or tracking for goods ensure lender confidence.
- Currency Match: Align loan and transaction currencies to avoid FX mismatch.
- Counterparty Strength: Engage quality suppliers and buyers to reduce credit concerns.
- Regulatory Preparedness: Complete AML/KYC checks in advance of closing.
Engagement
Importers, exporters, and commodity traders seeking tailored trade-finance loans are invited to contact FG Capital Advisors. We deliver indicative terms within five business days of receiving required documentation.
The information provided is for informational purposes only. It does not constitute investment advice or an offer to buy or sell any security or service. Seek independent professional advice before acting on any information herein.
