Trade Payable
Funding
Trade Payable Funding is an unsecured working capital tool that encourages foreign suppliers to offer North American importers extended payment terms. First Capital assures immediate, non-recourse payment to foreign suppliers once the importer confirms its obligation to pay for goods and/or services supplied
Importers seeking to:
- Improve cash flow by obtaining
extended, unsecured payment terms from exporters in lieu of letters
of credit or up-front cash
payment
- Gain price discounts from suppliers
for providing early funding of payables through First Capital
- Improve leverage through use of
unsecured trade credit facilities
Suppliers
seeking to:
- Improve cash flow by discounting
(without recourse) accounts receivable (A/R)
- Use importer’s creditworthiness
and market conditions to improve cost of export accounts receivable
(A/R) finance
- Obtain 100% guarantee of importer
bankruptcy
- Increase competitiveness by offering
credit terms
- Improve leverage through unsecured
export financing
Description
Trade Payable
Funding is an unsecured working capital tool that encourages foreign
suppliers to offer North American importers
extended payment
terms. The program assures foreign suppliers immediate, non-recourse
payment once the importer confirms its obligation to pay for
goods and services supplied.
Importers evidence their irrevocable payment obligation by signing
a Trade Draft, an international payment instrument, which First
Capital immediately discounts to the supplier. First Capital
collects funds
from the Importer on the maturity date of the Trade Draft.
Structure
/ Process
- Importer purchases goods / services from the Supplier
- Supplier invoices the Importer for the goods/services
- Importer approves the supplier’s invoices and signs
a Trade Draft, committing to pay for approved invoices
on the agreed due
date
- Supplier requests First Capital to discount the Trade
Draft
- First Capital purchases the Trade Draft and pays the
supplier 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:
- Creditworthy North American
importers of goods / services;
- Foreign exporters selling
to the above importers
Pricing
Depends on the volume and size of invoices and the credit
quality of importers
Criteria
Minimum annual volume of:
$5 million
Minimum Trade Draft value: $50,000
Minimum importer credit quality: $500,000 minimum net worth; Two
years of profitability
For
further information, please call 800-619-0804 or click Contact
Us. |
