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Our offering

Trade Finance offers a broad range of solutions to meet client needs. Each client’s trade and working capital cycle will differ, so it’s important to understand where working capital is being tied up in the business’ supply chain.

Let’s look at three Trade Finance solutions in more detail.

Click each of the Trade Finance solutions to discover more.

Import Documentary
Letter of Credit

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A Documentary Letter of Credit is a common payment method used by importers and exporters globally. It is issued by the importer’s bank in favour of the exporter, guaranteeing payment of the shipment, provided the exporter meets the terms and conditions.

There are two types of payment terms:

  • At sight – where payment is made on first presentation of the exporter’s shipping documents
  • After sight – where payment is available on a fixed date in the future, for example, 30 days from the shipment date

Documentary Letters of Credit are administered and regulated by the International Chamber of Commerce.

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Without Recourse
Export Finance

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Whilst Documentary Letters of Credits are a safe way for exporters to receive payment, there are a number of risks that could frustrate their payments.

CommBank helps our exporting customers receive their payments through a Without Recourse Export Finance (WREF) solution, by managing their counterparty risks and accepting their documentary risks.

To be eligible to undertake these transactions:

  • Clients must be experienced exporters and valuable customers of CommBank
  • CommBank must have available WREF limits on the Issuing Bank or Alliance Bank in the case of a sell-down arrangement
  • Client must provide compliant shipping documents

Fees and interest are charged for the period of finance under the Documentary Letter of Credit and margins and returns are commensurate with the risk of the issuing Bank and Country.

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Trade Advance

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Trade Advance is a short term financing facility used by importers and exporters to fund their working capital requirements in accordance with their trade payment activity.

Key features of Trade Advance

  • It is useful for clients’ purchasing, stock holding and selling activities.
  • Financing tenors are aligned to the customer cash conversion cycle up to a maximum of 185 days.
  • Financing is available in major currencies and is aligned to the currency of the respective transaction.

Trade Advance transactions can be used to finance a number of payment arrangements between an exporter and an importer.

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