Financely Group works with importers globally in order to help them secure trade finance facilities, including letters of credits & performance bonds
Introduction
If you are an importer it may be obvious to you that your supplier will not ship the goods until they have received payment (or some form of security for their payment). However, from the exporters point of view there is more risk involved in shipping goods to an unknown importer. For this reason, payments in international trade are usually protected by a bank guarantee. The most common instrument used for this purpose is the letter of credit (L/C) which is issued by the buyers bank and guarantees that payment will be made once certain conditions have been met by the seller. Trade finance facilities allow importers to increase their purchasing power with suppliers and enables them to obtain increased access to working capital as well as providing an effective mechanism for managing currency exchange rates or mitigating against non-payment risk.
Financely Group are specialists in trade finance, and we have extensive experience in assisting not only companies who export, but also those who frequently import.
Our team is a specialist in trade finance and we have worked with importers in a range of sectors. The most common being energy (oil and gas), commodities, pharmaceuticals, machinery, clothing and footwear and other manufactured goods.
We understand that every business has specific requirements and we are happy to talk through your needs so that you can find the most suitable solution for your business.
We have worked with importers in a range of sectors, with the most common being energy (oil and gas), commodities, pharmaceuticals, machinery, clothing and footwear and other manufactured goods.
We have worked with importers in a range of sectors, with the most common being energy (oil and gas), commodities, pharmaceuticals, machinery, clothing and footwear and other manufactured goods.
In addition to our work with existing importers we also work closely with manufacturers to source new customers for them. We are currently working with a number of world class manufacturers who are looking to expand into new markets by partnering up with an experienced international buyer.
Many of these companies have been trading for many years but want to diversify their portfolio or increase their turnover by establishing themselves as a global supplier via an international distribution network.
Globally there is a high level of demand for letters of credit (L/Cs) to protect importers from the risk of non-payment from buyers. We can assist importers by providing Standby Letters of Credit which are often accepted by exporters as a substitute for an L/C issued by the buyer.
What is a letter of credit (L/C)?
A letter of credit is a document issued by the buyer to its bank instructing it to pay money or make delivery in accordance with the conditions laid out in the document. In order for an L/C to be valid, it must be signed by both parties and should indicate clearly what type of commodity is being shipped and where it’s going.
Financely Group does not offer loans or extend any credit to importers for transactions. Our services involve connecting importers with financial institutions that will provide the letter of credit against an independent bank guarantee issued by our group on behalf of the importer.
Financely Group does not offer loans or extend any credit to importers for transactions. Our services involve connecting importers with financial institutions that will provide the letter of credit against an independent bank guarantee issued by our group on behalf of the importer.
The process begins with the importer providing an order to Financely Group, who then forward this information to their network of banks in China and other regions. The selected bank will then issue a letter of credit based on your financial documents (such as import/export invoices) which you submit at time of application. Upon approval, we release funds from our escrow account through wire transfer or check payment into your bank account within 2 business days after we receive payment confirmation from our partner bank’s agent in China or elsewhere around Asia.
This provides a simple solution for importing companies who may otherwise be unable to raise an LC when required due to reasons such as their financial status, or because they do not have a strong enough relationship with their bank.
The letter of credit system is the most common way of financing international trade. A buyer arranges for an LC to be opened at a bank, which provides the seller with credit that can be drawn upon when payment is made. This provides a simple solution for importing companies who may otherwise be unable to raise an LC when required due to reasons such as their financial status, or because they do not have a strong enough relationship with their bank.
However, it can be difficult for importers to obtain an LC without having first built up positive trade relationships with banks over time. Banks are more likely to provide an LC if they are confident that the importer has a strong relationship with a bank that is willing to provide a guarantee. Financely Group provides this assurance by acting as guarantor on behalf of our clients — enabling them to secure trade finance facilities without necessarily requiring them themselves being current or good standing customers with any particular banking institution in advance of seeking these facilities so long as Financely Group itself is able to present acceptable evidence showing how we perform this role in relation our client’s business activity(ies).
Conclusion
So to summarise, our letter of credit services are designed to assist importers by providing a bank guarantee as an alternative method of raising a letter of credit. As with most financial services it is important that you understand the terms and conditions of any facility or service being offered. So please ask if there is something you do not understand or if you need additional information.
