Commodity trade finance
Pre-export finance means providing financing to the trader or producer for purchase, transportation, warehousing, tolling (processing) of the commodity for the subsequent sale of the final product (commodity) to the off-taker acceptable to the Bank. Such commodity could be either already available in possession of the borrower or being purchased for account of the borrowed funds. We can differentiate two types of pre-export financing:
- Financing of trading (purchase and sale) – mostly self-liquidating transactions
- Financing of production (purchase of one product for further processing into another product for sale). In such case a trader could also act as producer in case it processes the product with other entity under the tolling scheme
Post export financing starts when the commodity is already shipped under the sale contract and the only payment of the off-taker is expected. It is meaningful in case there is differed payment under the contract. And the financing purpose is to cover the gap between the shipment and the receipt of money under the sales contracts.
Stock financing means financing against the existent commodity in stocks without having proved source of repayment. Such financing is possible in case of good liquidity of the commodity.
Structured trade finance offers tailor-made financial solutions for the financing of international export and trade transactions on the basis of “individual delivery contracts". The financing is adjusted to the individual production, delivery and payment cycle of each single transaction.
Import financing implies the financing of the importer of the commodity.
