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Cash in on Trade Finance, While Tracking Trends

Author: Mr Dimitri Rusca
by Mr Dimitri Rusca
Posted: Dec 14, 2017
trade finance Trade Finance

This is what they say, 'invest', and trade financedescribes the administration of money, banking, credit, investments and assets for international trade connections.

Parties involved with trade finance and commodity trading services are mostly importers, exporters, financiers, insurers and other service providers.

How to stay in the game?

  • Understand the product and what factors control its value. And, understand the process to avoid mistakes or unnoticed errors.
  • You want to have a safe deposit, get insurance for the trade, and know the risks involved when the products are transferred to the buying or receiving party.
  • Of course, do not rush into an opportunity, access the situation, and understand the areas of risk in areas which are vital in Trade Finance situations.
  • You must also know the import or export options you have. After which, you should access the risks of each option, and make preparations for the outcome.
  • Although the outcome may not be as expected, the result should be 'close to the line you plot on the graphs.'

Preparation

  • To know what the process is all about; and to monitor its progress, you must do some research on this type of trade condition.
  • Try to obtain information about the receiving party, the import, and export facilities available. Credibility is established through consistency and the rate of successful results.

Caution, be cautious!

Despite the knowledge of many risks and likely occurrences, one must be careful when the plan you desire to implement require a loan; a big sum.

Trade regulations may seem desirable on your side, but may vary on the receiver's side. Trading products may include:

  • Goods that brought in and are in the process of handing over to a buying party with the receiving party's order being held.
  • Accompanied by quality control measures are in place.

The objective is to encourage trade by making use of non-standard security. In bilateral trading relationships STF is generally used in high-value transactions. STF is commonly related to commodity trading as a more complicated type of finance.

Structured trade finance products are most prevalent within the commodity sector. It is used by processors, producers, end-users, as well as traders. To meet the precise needs of the clients these financial arrangements are tailored by banking organizations. STF products are primarily working pre-export financing, warehouse financing and capital financing. Along with other customized finance products there are also some institutions that extend reserve-based lending, as well as, finance the conversion of raw materials into products. STF products are extended across the supply chain in order to promote trading activities.

By limited recourse trade finance lines STF structures are sponsored. When viewed in isolation the structure aims to act as an enhancement on the position of the borrower and at offering better security mechanism.

How Has Technological Advancements Complemented STF?

Some of the STF products that have been positively affected by the latest technological advancements are factoring and forfeiting, trade credit insurance, letters of credit, bank assurances. The massive progress in communication and information domains has also helped the banking institutions to track the physical risks and events in the supply chain between the exporters the importer recent developments have been changed by these products have changed.

About the Author

Rusca Dimitri works in for a trade finance company for more than 20 years. He has good management skills and during his free time he writes short articles on Trade Finance Systems, and Trade Finance services.

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Author: Mr Dimitri Rusca

Mr Dimitri Rusca

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Switzerland

Member since: Aug 11, 2016
Total live articles: 73

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