Bank ABC offers its clients a comprehensive import and export trade finance services, regional international connections, and consulting services to keep you competitive.
Bank ABC is keen to efficiently serve its clients and enables them to complete their deals effectively.
Our trade finance services include:
- Export and Import business
- Bill Acceptance /Forfeiting /Discounting/Negotiation
- Syndications
- Letters of Guarantees
- Vostro Accounts
1) Export and Import Business:
When it comes to payment for your imports and/or exports, various arrangements are possible due to the fact that the degree of trust/security between buyer and seller varies accordingly. One of the following products may be used:
- Open account
- Documentary collection
- Irrevocable confirmed letter of credit
- Irrevocable unconfirmed letter of credit
- Payment Guarantee
- Standby letter of credit
- Prepayment
Open Account
If the amount involved is fairly small and/or mutual trust exists between the buyer and the seller, an open account will keep the banking cost as well as administrative burden to a minimum.
Documentary Collections
Where the parties are looking for a higher level of security, documentary collection may be used mediating two banks to exchange the shipping documents with proceeds. However it still does not have any commitments on the banks involved. It is worth mentioning that Documentary Collection may be against payment or against acceptance of seller’s draft or against a collection bank guaranteeing to pay at respective maturity.
Irrevocable Confirmed L/C
A confirmed letter of credit means that in addition to the issuing bank a second Bank (the confirming bank) assumes the commitment to pay if the terms & conditions of the credit are fulfilled. The seller thus avoids the credit and sovereign risk.
Irrevocable Unconfirmed L/C
An irrevocable unconfirmed letter of credit commits the issuing Bank to pay to the seller Bank provided that proper shipping documents are presented within the time and according to the condition stipulated in the documentary credit. No commitment on the part of the advising bank exists.
Payment Guarantee
A payment Guarantee contains the promise of a Bank to pay an exporter on first demand if the letter presents a statement to the bank confirming that he has not been paid for the goods or services he has supplied. The Payment Guarantee is frequently used with the “Open Account” method of payment.
Standby Letter of Credit
A Standby Letter of Credit is essentially a substitute for a Payment Guarantee.
Prepayment
In small sized transactions as well as lack of trust between the buyer and seller when the seller is in better position that enables him to set his rules, the seller will opt to bear any risk and obliges the buyer to pay in advance.
2) Bill Acceptance /forfeiting /Discounting/Negotiation:
We offer different products that can streamline a business’s finances and cash flow.
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Bill Acceptance
Acceptance means that a bank guarantees payment of the instrument that was accepted by it whether it is a bill of exchange or a set of documents presented under a L/C. The acceptance of the bank give value to the payment instrument in the Market and give the opportunity to its holder to discount it and positively improves its cash flow.
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Forfeiting
Forfeiting is the purchase (without recourse to any previous holder of the specific form of trade instruments) of debt instruments due to mature in the future.
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Discounting
Discounting Bills gives customers short-term working capital finance by discounting accepted Bills of Exchange or Promissory Notes.
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Negotiation
Negotiation is another variation of discounting whereby ABC Bank decides to pay a document’s value to the beneficiary with recovers. This product differs from discounting in that it does not require waiting for the acceptance of documents from the issuing Bank.
3) Syndications:
The most important development in the field of international lending during the past 30 years has been the significance of the business deals. Those developments made banks think twice before approving loans of a significant size. Moreover regulations set rules for the maximum amount a bank can offer to a single client in the light of its equity.
State of art applications as well ABCE enable the bank to act as a lead or a participating bank in such loan syndication deals under one of the following instruments:
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Term Loan
A loan with a specific amount for a set period of time that it may be repaid as a bullet loan according to a repayment schedule after a relevant grace period of time.
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Revolving Credit
This Facility is also available for a specific amount for a set period of time but will offer the borrower the flexibility to borrow, repay and redraw the loan partially or in full at its sale discretion.
4) Letters of Guarantee :
Instruments for securing performance that enables the buyer to be certain that the seller is in a position to honor his commitment as offered or contracted.
Such objective may be obtained through banks in one of the following products:
- Bid Bonds
A debt secured by a bidder for a construction job or similar type of bid-based selection process for the purpose of providing a guarantee to the project owner that the bidder will take on the job if selected.
- Advance Payment Guarantee
Contracts frequently stipulate that the seller is to receive an advance payment. This payment is intended to allow the seller to purchase raw material or to cover initial production costs to ensure that such funds are not used to purposes other than those stated in the contract to the buyer to reconcile this payment when paying further installments an advance payment guarantee will be demanded to serve these purposes.
5) Vostro Accounts:
It is our product introduced to financial institutions whereby they are invited to open an account in our books of different currencies that enable them to perfectly utilize their cash when effectively payments are at the request of their clients.