Trade Finance Services

This is the term used for the department in a commercial or investment bank where trade transactions (cross border and domestic) are financed.

Financing is usually between a supplier and end buyer; with the occasional involvement of a trader. The idea of trade finance is to mitigate risk throughout the life cycle of a transaction. An exporter will do this by covering the non-payment risk of the buyer with a documentary credit issued by a bank. Funds are only advanced to the exporter when he presents the documents that fulfil the terms of such credit. Within trade finance we also see many other risks that mitigate, such as standby documentary credits which acts as a guarantee and are activated when a payment does not take place. Guarantees are also used by banks to stand behind a contract. Documentary credits such as letters of credit are used to facilitate cross border trades. There are many types of bonds that are also used to ensure trust in cross border relationships; which can include bid bonds.

Bank Guarantees

We offer you several types of guarantees: payment guarantee, tender guarantee (bid bond), performance guarantee and advance payment guarantee. Our guarantee represents an irrevocable obligation of the bank to pay a specified amount of money if the party for which the bank is giving the guarantee does not fulfill its contractual obligations.

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