Aston Mortgage staff have been assisting importers and exporters for many years in managing the cash-flow in their business through the provision of Trade Finance facilities.
More and more Australian businesses now deal with Asia (China and India particularly) for supply of goods, manufacture of components and a variety of other reasons. Often the same businesses then export the completed goods to European or US markets.
We can establish the following types of Trade Finance facilities for your business:
- Trade Finance Loan- Exporters can fund their manufacture cost obligations etc specific to an underlying trade transaction (sale) that must be evidenced by the appropriate documentation. Goods are then delivered/shipped to the purchasing importer and the Trade Finance Loan is repaid once payment is received from the importer. Alternatively, an importer may seek a Trade Loan to assist with the payment for goods they are importing pending arrival and sale of the goods to their local buyers.
- Documentary Letter of Credit- a bank guarantee provided by the importer’s bank to the exporter guaranteeing payment for the shipped goods upon presentation of shipping documents (and meeting any required conditions) or at a future specified date. This payment arrangement shares the risk between the exporter and importer and is often used when they are still establishing a trade relationship. For the importer, there is some assurance that the goods are shipped prior to payment being made, and for the exporter, they are guaranteed payment provided they ship the goods and meet any agreed conditions.
Managing risk in your business is important to us at Aston and we have access to the Major Bank capital markets sections who can assist you to protect against commodity price and foreign exchange movements.