- 30 May
Paying Overseas Suppliers By Letter Of Credit (LC)
What Is A Letter Of Credit (LC)?
A "letter of credit" is a financial instrument issued by a bank or similar financial institution that requires the supplier of goods to submit specified documents in order to receive a specified payment after a given time.
This gives the overseas supplier the confidence to ship your goods knowing that they will be paid if they satisfy the requirements of the letter of credit and it gives the buyer the confidence to know that payment can only be taken providing the required documentary evidence is supplied.
Typically a letter of credit might require the supplier to present shipping documents such as a bill of lading or airway bill, insurance documents, if appropriate, and documents to evidence the goods such as packing lists, inspection certificates and invoices.
How Can I Establish A Letter Of Credit?
You can establish a letter of credit via a bank or a trade finance house. If you establish one via a bank you may have to provide cash cover unless you have a trade finance facility. Trade Finance, also known as Import Finance, is a funding solution when raising a letter of credit. A trade finance provider will issue the letter of credit and either grant you a period of credit to repay the cost of the LC or the facility can be repaid from the proceeds collected from your customers. The trade finance provider can also assist you with the credit control function associated with collecting in your sales invoices from your customers, so you receive your profit margin less their charges.
- 19 Jun
Are There Fewer Trade Finance Companies?
Importers often turn to trade finance (TF) as a way of paying their suppliers. The trade finance house will pay the supplier (normally once evidence of having shipped the goods is provided) and then the importer has a period of credit in which to sell the goods on.Whilst there may have been some providers leaving the market, but there are still options available for those looking for finance...
- 11 Sep
Bibby Financial Services Launch Pre-Shipment Trade Finance
Bibby Financial Services (BFS) have launched pre-shipment trade finance to support UK importers needing to pay overseas suppliers in advance of goods being manufactured and shipped.REQUEST A CALL FROM BIBBYTraditionally, trade finance is only available to pay overseas suppliers, once the goods have been shipped. It them provides the importer with the opportunity to sell on the shipment of goods,...
- 26 Oct
Funding Exports To The Former Soviet Bloc
Another example of the diverse range of customer issues that we are able to solve. We were contacted by an exporter that has two debtors based in a former Soviet bloc country. He was looking for finance against his sales to these debtors and had not had any success finding a funding company that could assist with prepayments against his invoices.We spoke to a number of our funding partners and...
- 22 Oct
Trade Finance For UK Purchases
Trade finance is often presumed to be a service solely for importers, it is often referred to as "import finance". However it can also be used to help you purchase goods from suppliers who are based in the UK. A better name is perhaps "purchase order finance". It is not exclusively for imports - any UK purchases have the potential to be funded and you can discuss your particular requirements with...
- 09 Oct
How To Increase Your Buying Power
If you are in a position where you could accept more orders if you were able to buy more goods, you may want to know how to increase your buying power. We have a solution called trade finance, a financial service that allows you to buy goods by bridging the cash flow gap between paying your supplier and receiving payment from your customers.You may even be able to negotiate pricing discounts with...
- 05 Aug
The Benefits Of Using A Trade Finance Broker
We have just seen a real example of the benefits of using a trade finance broker, in action.We had a trade finance enquiry recently, from a company that were looking for a trade finance facility in order to fund imports to the UK.Initially, the company used one of the direct contact forms on our site, to request a quote direct from one of our panel of trade finance companies. So by using this...
- 22 May
Pre-Invoicing Requires Trade Finance
Pre-invoicing is normally a "no-no" in the invoice finance arena but in this case we found a way around it for our client.It means is that the supplier is raising their invoice, to their debtor, before they have delivered the goods (or services) to which the invoice relates. The normal course of business would be to raise invoices, in arrears, after delivery of the product or services.Normally,...
- 21 Oct
Woodsford Tradebridge Launch Event
I was very pleased to be invited to the launch party for Woodsford Tradebridge which was held last night, on the iconic London Eye. A superb venue for such an event. The event took place during 2 rotations of the eye and guest took in some amazing views across the city of London whilst champagne and canapes were serves during the "flight".Woodsford Tradebridge is a new trade finance and invoice...
- 06 Sep
Trade Finance Quotes
We are currently working on trade finance quotes for customers and we will shortly be adding some more details of recent costings to our website. On the FundInvoice site we have always tried to bring customers actual examples of prices, and trade finance is the one area where we want to add some more actual examples so clients have an idea of the costs, even before we get them a quote.It is a...
- 09 Jun
Meeting With A Trade Finance Company
We had an interesting meeting with a trade finance company today. They serve the more credit worthy end of the market, but do so without any security whatsoever i.e. no personal guarantees or other security required. This means that it will not affect your other borrowing facilities. In addition to the normal funding of imports, they can also provide a trade facility for transactions within the...
- 05 Apr
Trade Finance Available
Trade finance can work in a number of ways but in simple terms it bridges the gap between having to pay for goods (often shipments of imported goods) and getting paid for them by your buyers, once you have sold them. I started work in trade finance, in 1988, way back when Barclays had a trade finance arm called Bexco Ltd. Since then there have been several revolutions of providers withdrawing...
- 02 Jul
Trade Finance and Import Finance
Trade Finance (or import finance) can be used to finance imports from abroad into the UK. You can even repay the trade finance using your sales invoices via invoice finance - a very neat solution for importers: FundInvoice | Trade Finance & Import Financing | FundInvoice....
- 09 Mar
Trade Finance Article
Trade Finance can be used to finance the import of goods from abroad and bridge the gap between having to pay your supplier and receiving/selling the product. This article is about: Trade Finance...
- 25 May
Trade Finance Can Fund Your Imports From Abroad
If you are an importer of goods from abroad trade finance could help you fund and pay for those imports and shipments.If you have confirmed orders from well known debtors against which you are importing goods into the UK, trade finance could make the payments to your overseas suppliers for you (by letter of credit if necessary) and then the trade finance is repaid from the money received from...