Trade Finance Term Sheet

Borrower terms for contract-backed and commodity trade finance: DLC/SBLC, bridge, first-loss, 70–90% advances, SOFR/EURIBOR +6–12%, NY/English law.

Key Terms – FG Capital Advisors

Key Terms: Trade Finance and Structured Commodity Trade Finance

Indicative ranges and structures for contract-based finance, SCTF, letters of credit, standby letters of credit, bridge loans, and junior capital.

Products Covered
  • Contract-based / Prepayment finance (against offtake or supply contracts)
  • Structured Commodity Trade Finance (inventory, transit, and receivables)
  • Documentary Letters of Credit (DLC) issuance and confirmation
  • Standby Letters of Credit (SBLC) issuance and confirmation
  • Bridge loans for shipment gaps and closings
  • First-loss capital injection (sponsor or third-party junior tranche)
Facility Size USD/EUR 2,000,000 to 100,000,000 per borrower group; single transactions from 1,000,000.
Tenor
  • Contract-based / SCTF: 60 to 270 days per cycle, extendable to 360 days
  • DLC: 90 to 360 days (sight or usance)
  • SBLC: typically 12 months + 1 day
  • Bridge loans: 1 to 12 months
Advance Rates
  • Eligible receivables: 70% to 90%
  • Inventory in bonded/approved warehouses: 70% to 85% (with CMA)
  • Inventory in transit: 60% to 80% (title docs required)
  • Against confirmed DLC or SBLC proceeds: up to 90% of face value
Pricing
  • Contract-based / SCTF: SOFR or EURIBOR + 6.0% to 12.0% p.a. (floors may apply)
  • DLC issuance: 0.75% to 2.00% p.a. of face value; confirmation 0.25% to 1.00% per 90 days
  • SBLC issuance: 1.50% to 4.00% p.a. of face value; confirmation as quoted
  • Bridge loans: 1.25% to 2.50% per month; OID 1% to 3%
  • First-loss capital: 10% to 30% of facility as junior tranche; economics agreed case-by-case
Fees
  • Arrangement: 1.5% to 3.5% of facility
  • Commitment (undrawn): 0.50% to 1.00% p.a. where applicable
  • Agency/monitoring: as quoted per transaction or per month
  • Legal, due diligence, KYC, inspections, and SWIFT: at cost to borrower
Security Package
  • Assignment of contract proceeds and receivables
  • First-ranking pledge over goods, warehouse receipts, and title documents
  • Control over collection accounts and escrowed proceeds
  • Collateral Management Agreement (CMA) with approved operator where required
  • Corporate guarantees or SBLC support where needed
Use of Proceeds Restricted to eligible trade cycles: purchase of goods, freight, insurance, duties, and verified working capital linked to the contract.
Key Covenants
  • Borrowing base coverage 110% to 130% at all times
  • No new liens or pari passu debt without consent
  • No dividends, loans to affiliates, or asset disposals outside ordinary course
  • Maintain hedges for price risk and FX where exposure is material
  • Minimum tangible net worth and liquidity tests as agreed
  • Sanctions, AML, and anti-corruption compliance; no PEP or restricted party exposure
Reporting and Monitoring
  • Weekly inventory and shipment reports during drawdown
  • Monthly management accounts and aging of receivables
  • Inspection rights and site visits; field exams as requested
  • Bank statements for pledged accounts
Conditions Precedent
  • Full KYC/AML, corporate approvals, and legal opinions
  • Executed offtake/supply contracts with acceptable counterparties and Incoterms 2020
  • Insurance: cargo, stock, and where relevant political risk or credit insurance; lender named as loss payee
  • Assignment of proceeds, perfected security interests, and account control
  • Independent valuation or inspection where required
LC / SBLC Rules DLCs subject to UCP 600. SBLCs subject to ISP98. Demand guarantees may follow URDG 758. URC 522 for collections when applicable.
Governing Law and Jurisdiction
  • Facilities: English law or New York law
  • Dispute forum: English courts or New York courts; ICC or LCIA arbitration available case by case
  • Local security governed by the law of the asset location
Eligibility Post-revenue companies with verifiable trade history. Preference for EBITDA above $10,000,000 and audited financials. Startups and shell entities are not eligible.
Events of Default
  • Payment default or breach of financial covenants
  • Misrepresentation, fraud, or sanctions breach
  • Cross-default above agreed thresholds
  • Material adverse change impacting performance of the trade cycle
Process and Timing
  • Week 1: intake, NDA, document checklist, preliminary term sheet
  • Weeks 2–3: due diligence, approvals, definitive documents
  • Weeks 3–4: collateral setup, account controls, first draw or LC issuance
First-Loss Capital Sponsor contribution or third-party junior tranche sized at 10% to 30% of facility. Funds escrowed prior to first draw. Waterfall seniority and economics agreed in final documents.
Borrower Costs All external counsel, auditor, inspection, collateral manager, courier, and SWIFT fees for borrower’s account.
Notes No guaranteed offers or pay-to-play “monetization.” Engagements are best-efforts and subject to underwriting and approvals.

Important disclosures: This is an indicative summary only. Terms are subject to full underwriting, credit approval, and final documentation. Facilities are provided by regulated lenders and are not assured. FG Capital Advisors acts on a best-efforts basis and does not issue bank instruments. Only post-revenue companies are served, with a preference for EBITDA above $10,000,000. Fees, rates, and ranges are illustrative and may change by jurisdiction, counterparty, collateral, and market conditions.

Request Definitive Term Sheet