FREE TRIAL NEWS EVENTS PUBLICATIONS MULTIMEDIA DIRECTORY AWARDS SUBSCRIBE GTR VENTURES RECRUITMENT WHAT IS TRADE FINANCE? Trade finance is the financing of international trade flows. It exists to mitigate, or reduce, the risks involved in an international trade transaction. There are two players in a trade transaction: (1)an exporter, who requires payment for their goods or services, and (2)an importer who wants to make sure they are paying for the correct quality and quantity of goods. WHAT ARE THE RISKS? As international trade takes place across borders, with companies that are unlikely to be familiar with one another, there are various risks to deal with. These include: Payment risk: Will the exporter be paid in full and on time? Will the importer get the goods they wanted? Country risk: A collection of risks associated with doing business with a foreign country, such as exchange rate risk, political risk and sovereign risk. For example, a company may not like exporting goods to certain countries because of the political situation, a deteriorating economy, the lack of legal structures, etc. Corporate risk: The risks associated with the company (exporter/importer): what is their credit rating? Do they have a history of non-payment? To reduce these risks, banks – and other financiers – have stepped in to provide trade finance products. TYPES OF TRADE FINANCE PRODUCTS The market distinguishes between short-term (with a maturity of normally less than a year) and medium to long-term trade finance products (with tenors of typically five to 20 years). These are the different types of trade finance products that GTR typically writes about: Letter of credit Supply chain finance Structured trade and commodity finance Export and agency finance Trade credit and political risk insurance take me back UPCOMING EVENTS Dec 08 2021 GTR US 2021 New York New York, US Feb 14 2022 GTR MENA 2022 Dubai, United Arab Emirates Mar 10 2022 GTR Africa 2022 Cape Town, South Africa [see more] DIRECTORY Get listed in GTR Directory now! Become a part of the most comprehensive contact listing of service providers in the global trade, commodity and export finance markets. Order your copy now MAGAZINE COVER STORY From the editor View recent issue's contents SIGN UP TO OUR NEWSLETTER SUBSCRIBE ABOUT US CONTACT US WHAT IS TRADE FINANCE? ADVERTISE REGISTER FOR ENEWSLETTERS SUBSCRIPTION DESIGN SERVICES RECRUITMENT TERMS AND CONDITIONS PRIVACY POLICY © Exporta Publishing & Events Ltd 2021