Trade Finance
Navigating the world of domestic and international trade can be daunting but it doesn’t have to be. Touchstone Finance & Leasing has been involved with trade finance for over 10 years. With our extensive network of strategic partners, we are able to supply you with the financing you need when you need it.
International Trade Finance
International trade finance allows both importers and exporters access to many financial solutions that can be tailored to their situation, and often, multiple products can be used in tandem or layered to help ensure transactions goes through smoothly.
Traditional Trade Finance
Trade finance products are long established and include letters of credit, bank guarantees and documentary collections, which are all used more frequently when trading partners do not know each other well or at all.
Supply Chain Finance
Supply chain is the flow of goods and services towards the end customer and the flow of money from the customer back up the chain to the supplier. Supply chain finance (SCF) refers to the techniques and practices used by banks and other financial institutions to manage the capital invested into the supply chain and reduce risk for the parties involved.
Benefits of SCF to Each Party Involved
Seller (Exporter)
- An exporter could be an often is a small and medium size enterprise, frequently based in a developing or emerging market, supplying to a large buyer, based perhaps in the America’s or Europe. In such a scenario, SCF provides us small supplier with a range of options for accessing affordable financing, perhaps reducing the time taken to collect payment in the significantly improving the company’s cash flow which can be used on something else
- Removes outstanding debts receivables a company is owed from their balance sheets
- Allows another party to assume the payment risk on their behalf
Buyer (Importer)
- SCF allows a buyer to utilize their often-higher credit rating to obtain better payment terms
- SCF enables an importer to assure the financial health of their suppliers and service providers which sustain a given supply chain. This helps ensure ongoing operations, timely production and continuing sales activity
- SCF enables importers to get banks and finance providers to assume the risk on their behalf
Banks
SCF means banks and other finance providers can purchase assets at a discount which they can then sell onto investors and/or make a profit when they collect the full amount of the receivables