Only a small part of international trade is paid cash in advance, as importers generally wish to pay, at the earliest, upon receipt of the merchandise in order to verify its physical integrity on arrival. Exporters, however, wish to be paid upon shipment. In order to bridge the gap between the time at which exporters wish to be paid and the time at which importers will pay, a credit or a guarantee of payment is required. Trade finance provides the credit, payment guarantees and insurance needed to facilitate the payment for the merchandise or service on terms that will satisfy both the exporter and the importer. As such, trade finance is often described as a lubricant of trade. Most trade credit, payment guarantees and insurance are short-term, with a standard maturity of 90 days. In certain cases, trade credit can be extended for longer periods of time, particularly for categories of goods subject to longer production and delivery cycles such as aircraft and capital equipment.
A key aspect of trade finance is that it helps mitigate the risk of cashless trade transactions.
Tamley can also finance full supply chain. We can provide funding to foreign suppliers based on your creditworthiness and financial strength, or support off-balance sheet inventory arrangements.
