What is Trade Finance & What Euro Exim Bank Offers
Trade finance is simply financing for trade, in this case international trade. Euro Exim Bank is able to function as an intermediary between seller and buyer to ensure smooth financing and payment settlement.
How it Works & Why it’s Necessary
Ideally, a seller (or exporter) would have the purchaser (an importer) pay in full as soon as the goods are shipped, especially because of the time taken for shipping and clearing at the destination. In such an event, the purchaser (importer) may want to reduce their risk by requiring the seller (exporter) to document the goods that have been shipped; to be sure that everything is above board.
This is where your bank can come in and provide various kinds of support. For example, the importer’s bank may provide a letter of credit to the exporter (or the exporter’s bank) providing for payment upon presentation of certain documents, such as a bill of lading. The exporter’s bank may make a loan (by advancing funds) to the exporter on the basis of the export contract.
Trade Finance Services at Euro Exim Bank
We offer a comprehensive portfolio of trade finance services to our customers, with a particular focus on assisting emerging market customers to engage with and access major lucrative markets. We are also committed to ensuring fast turnaround times and a seamless, easy documentation process.
Our trade finance services include:
Letters of Credit (LC)
A letter of credit or LC is a payment mechanism utilized in international trade to provide an economic guarantee from a trusted, creditworthy bank to an exporter of goods. In this arrangement Euro Exim Bank becomes the underwriter that assumes the credit risk of the buyer paying the seller for the goods.
Express Letters of Credit (ELC)
These are just like standard letters of credit but issued for a much shorter timeframe.
Stand-by Letters of Credit (SBLC)
A standby letter of credit is like a standard letter of credit except that it is retained as a “standby” and isn’t usually the intended payment mechanism. Standby letters of credit are intended to provide a method of payment in the event the buyer fails to honour the terms of the contract or defaults payment.
Bank Guarantees (BG)
A bank guarantee is an instrument that is used as a surety. Simply put, if a buyer provides a bank guarantee to a seller and then fails to pay the seller, the bank that issued the guarantee will pay the seller the agreed upon amount. Bank guarantees have other uses as well, such as when an individual or organization wants assure another party that payment will be made or to secure a debt obligation.
Trade finance services from Euro Exim Bank allow buyers and sellers across borders to transact with ease and confidence, facilitating global trade and a more connected world.