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Trade Financing
How Trade Finance Works
The function of trade finance is to introduce a third-party to transactions to remove the payment risk and the supply risk. Trade finance provides the exporter with receivables or payment according to the agreement while the importer might be extended credit to fulfil the trade order.
Finance trade needs, including:
- Inventory / stock financing
- Structured pre-delivery working capital (revolving working capital)
- Factoring (with recourse) / bill of invoice / AR discounting
- Overseas working capital loan
- Bank Guarantee (capped at 2 years tenure)
- EFS Trade Loan covers enterprises’ domestic and overseas transactions.
Am I Eligible?
- Be a business entity that is registered and physically present in Singapore, and
- At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership
- Have Group Annual Sales Turnover of not more than S$500 million
Without trade financing, a company might fall behind on payments and lose a key customer or supplier that could have long-term ramifications for the company
Trade finance allows companies to increase their business and revenue through trade
Funds are available almost immediately, which means you can improve your transaction flow. You’ll be able to keep your inventory or stock without having to pay large amounts upfront.