Trade Acceptance
Financing
Trade Acceptance Discounting is an unsecured working capital tool that encourages exporters to offer importers extended payment terms. First Capital assures immediate, non-recourse payment to exporters once the importer confirms its obligation to pay for goods and services supplied.
Exporters seeking to:
- Improve cash flow by discounting
accounts receivable (A/R)
- Use importer’s creditworthiness
and market conditions to improve cost of export A/R finance
- Obtain 100% guarantee against
importer bankruptcy
- Increase competitiveness by offering
credit terms to importers
- Improve leverage through unsecured
export financing
- Avoid unauthorized chargebacks,
discounts and allowances associated with open account payment
terms
- Maintain ownership of goods until
payment is assured
Importers seek
to:
- Improve cash flow by obtaining
extended, unsecured payment terms from exporters in lieu of L/Cs
or up-front cash payment
- Gain price discounts from exporters
for providing early funding of payables through First Capital
- Improve leverage through use of
unsecured trade credit facilities
Description
Trade Acceptance Discounting is an unsecured working capital tool that encourages exporters to offer importers extended payment terms. First Capital assures immediate, non-recourse payment to exporters once the importer confirms its obligation to pay for goods and services supplied. When necessary, Trade Acceptance Discounting can be used
to ensure that title to goods is not transferred until payment
is assured.
Importers evidence their irrevocable payment obligation
by signing
a Trade Draft, an international payment instrument, which First
Capital immediately discounts to the exporter. First Capital
collects funds
from the Importer on the maturity date of the Trade Draft.
Structure
/ Process
- Importer purchases goods/services from the
exporter
- Exporter ships goods and invoices the importer for the
goods/services
- Importer approves the exporter’s invoices
and shipping documents and signs a Trade Draft, committing
to pay for approved invoices
on the agreed due date. When necessary, original shipping
documents are released to the importer only upon acceptance
of the Trade
Draft
- Exporter requests First Capital to discount the Trade
Draft
- First Capital purchases the Trade Draft and pays the
exporter the discounted amount within 48 hours
- On the maturity date,
the importer pays the face amount of the Trade Draft to First Capital
This program is designed for:
- Foreign and U.S. exporters
selling to creditworthy importers
- Creditworthy U.S. and foreign
importers of goods/services
Pricing
Depends on the volume and size of invoices and the credit
quality and country of importers
Criteria
Minimum annual volume of: $3 million
Minimum Trade Draft value: $50,000
For
further information, please call 800-619-0804 or click Contact
Us. |
