Export Finance

One Minute Guide What is it? Export finance helps exporters to offer credit to their buyers. This means that they can offer "ship now, pay later" terms to buyers - and this is what buyers want. Export finance is provided by a specialist like PrimaDollar.

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PrimaDollar

One minute guide. Who is PrimaDollar? PrimaDollar is a UK-based trade finance platform working with exporters and importers on a global basis. What does PrimaDollar do? PrimaDollar

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Dual factoring

One minute guide. What is it? Dual factoring is the process of coordinating two factoring companies so that one of the companies can purchase an invoice from an exporter in one country and relying upon the other factoring company to collecting the amount due later from the buyer in another country.

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Ship now, pay later

One minute guide. What is it? This phrase describes how many buyers would like to source goods. They would like the exporter to ship first, allowing the buyer to pay later. But this can be problematic for many reasons: By

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International factoring

One minute guide. What is it? International factoring is the process of purchasing an invoice from an exporter in one country and collecting it later from his buyer who is in another country. This means that the exporter has been paid upfront, and the buyer can pay later.

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Letter of credit

One minute guide. What is it? A letter of credit ("LC") is a flexible and internationally accepted form of financial guarantee. What it does depends upon what it says. But with that caveat, it is commonly organised to support the trade in goods. In this situation, it is transmitted by the importer's bank to

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Discrepant LCs

One minute guide. What is it? Many exporters ask their buyers to arrange a letter of credit. This is a payment guarantee from the buyer's bank. It is intended to ensure that the exporter can ship the goods and be confident that the buyer will pay for them later. But the LC

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Retailer credit risk

One minute guide. What is the issue? There continue to be high profile casualties in the retail sector catching many exporters by surprise and leaving them with big losses. The retail landscape is changing around the world and there are winners and losers.

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Incoterms

One minute guide. What is it? Incoterms are terms like: FOB, CIF, DDP - and you will find them specified on purchase orders for the manufacture and import of goods. Incoterms are established by the ICC, and were last revised in 2010, so you should always see the

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Islamic trade finance

One minute guide. What is the Shari'a? The Shari'a is a body of rules based upon the Quran. Complying with these rules forms the basis of modern Islamic finance. In the Quran, there is a great amount of guidance as to how life should be lived, covering many topics. In

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Verification letters

One minute guide. What is a verification letter? A verification letter is a short letter referring to one or more commercial invoices, signed by the buyer and addressed to the trade financier. The letter confirms the buyer's confidence and satisfaction with his chosen supplier

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Buying houses

One minute guide. What is a "buying house"? Buying houses are a fact of life in the import and export markets of South Asia - India, Bangladesh, Sri Lanka, Indonesia, Myanmar, Pakistan ... Whilst many large buyers deal direct with factories, many mid-sized and smaller

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Shipping documents

One minute guide. What are they? Shipping documents are involved in the export and import of goods. The exact set of documents varies from trade to trade, and depends upon the incoterm that applies.

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Documentary collection

One minute guide. What is it? Documentary collection is a system to help exporters. It is used by exporters: to ensure that control of the goods is retained until the exporter is sure that the buyer will pay, and correspondingly,

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Open account

One minute guide. What is it? Open account means exporting on the basis of "ship now, pay later". Export the goods. Buyer promises to pay later. Trust

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Landing the shipment

One minute guide. What is this process? The process of importing goods involves "landing" them. Landing happens when goods have reached the import terminal and is the process of getting the goods through import customs. The shipped goods are physically handed over by

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Sell it before you pay for it

One minute guide. What does it refer to? Sounds like a great idea. But it may not be very smart. "Sell it before you pay for it" - receive goods from your suppliers and pay for them later, after you have sold them. The more you buy, the more cash you generate. Excellent!

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Import finance: accounting

One minute guide. What is the main question? When trade finance or supply chain finance is employed, buyers need to pay attention to the accounting treatment for the arrangements that are involved. When a supplier grants credit to a buyer by agreeing 30/60/90/120 days to pay an

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Basel 3 and trade finance

Five minute guide. What does Basel 3 say about trade finance? Basel 3 requires banks to keep high levels of capital against trade finance including letters of credit that they issue. Many banks are reducing or pulling out of trade finance services as a result. This guide is longer

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Export supply chain finance

One minute guide. What is it? Supply chain finance (or SCF) refers to a funding program implemented by a buyer to provide early payments to his suppliers. It typically works like this: The buyer teams up with one or banks,

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First dollars, second dollars

One minute guide. What are first and second dollars? Exporters, like any business, have different sources of finance at different costs. The cheapest source of finance can be called the first dollars. These first dollars usually come from their local bank and are low cost because the bank takes collateral

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PrimaDollar calculator

One minute guide. What is it? Our clients want to know what our service costs. We provide a simple product at a simple price. You can price your trades online without having to call us. The pricing calculator is available from our main menu, and is located: here.

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PrimaDollar credentials

One minute guide. Reliable, timely, simple We offer a simple trade finance product. We pay the exporter at shipment and the buyer can pay later. If the buyer cannot pay, we take the risk. Buyers get open account or sale contract terms, whilst the exporter is paid upfront. This is exactly what importers and exporters need

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Trade finance: risks

A one minute guide What is a trade receivable? Trade generally involves the creation of trade receivables. These arise where the exporter ships, but the buyer pays later - a "ship now, pay later" trade. The obligation of the buyer to pay later is a receivable – a “trade receivable” – which

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Trade finance: credit risk

A one minute guide What is credit risk? Investors who finance a portfolio of trade receivables or an individual trade receivable face credit risk. Credit risk is the risk that one or more parties involved in a trade receivable are unable to meet or do not meet their financial obligations.

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Trade finance: fraud risk

A one minute guide What is this risk? All businesses face a risk of fraud – whether that is coming from their customers or from inside the company. Mitigating fraud risk involves procedures. Good working practices reduce the risk that a fraud can occur by detecting or deterring

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Trade finance: performance risk

A one minute guide What is this risk? Investors who finance a portfolio of trade receivables or an individual trade receivable face performance risk. Performance risk is the risk that the buyer, who owes the money, can legitimately avoid paying because the supplier has failed

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Trade finance: commingling risk

A one minute guide What is a commingling risk? This is a risk for an investor who finances a portfolio of trade receivables. Commingling risk is a catch-all term for the risk that the buyer pays but the investor does not receive the money. The cash that the buyer paid gets lost or absorbed in transit. It is a big issue in

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Trade finance: landscape

A two minute guide Alternative trade finance Investors, lenders and corporates are bombarded with propositions involving trade finance and trade receivables, especially from the new breed of alternative trade finance providers. This guide sets out the different business models and what they aim to achieve, splitting the market

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Open trade finance

One minute guide What is Open Trade Finance? Open trade finance is a simple, low cost and collateral-free way to finance international trade.  Trade finance is needed when an exporter wants to be paid at shipment but a buyer wants to pay later. Open

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