Trade Finance – Stronghold Venture Partners

Trade Finance is the financing of goods or services in a trade or transaction, from a supplier through to the end buyer. The core principles of trade finance operate in much the same way as a merchant bank, the focus being the transaction rather than a business’s balance sheet.

Trade Finance accounts for 3% of all global trade, worth some $3tn annually. ‘Trade Finance’ is an umbrella term, which includes a variety of financial instruments that can be used by an importer or exporter.

These include:

Stronghold offers Trade Finance to assist a business in fulfilling orders internationally.

Main Criteria

Goods are sourced from a reputable supplier.
Supplier can deliver goods in a timely fashion and to the buyer’s required specification.
The transaction must be ‘closed’, i.e. have a defined supplier and buyer.
The ultimate buyer must be either Investment grade; credit insurable, or provide an acceptable bank guarantee/letter of credit.
Logistics to move goods from the supplier’s warehouse to the buyer’s premises can be validated and controlled.
Goods must have a minimum shelf-life of 6 months.
Maximum pre-shipment risk of 90 days/Maximum post-shipment risk of 120 days.

Main Criteria

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