Trade finance is used when financing is required by buyers and sellers to assist them with the trade cycle funding gap. Buyers and sellers can also choose to use trade finance as a form of risk mitigation. For this to be effective we require visibility over the trade cycle throughout the transaction
Commodity Trade Finance
Zenith, LLC is dedicated to meeting the specific needs of our clients. We have a long tradition of financing trade. In addition to standard trade finance products, the teams provide sophisticated and innovative structured solutions to a wide variety of risk mitigation and financing needs for corporate customers.
highly experienced with the provision of funding advice. We specialize in assisting those clients whose existing bank facilities are unable to meet their requirements. Usually, we do not require collateral and no fees are charged without the proper instrument being issued.
Leasing and Asset-backed Finance
No Upfront Payment
Zenith, LLC does not require collateral and no fees are charged without the proper instrument being issued. We tailor-study the best finance and payment terms for your project to enable you to trade with peace of mind.
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: (party 1) an exporter, who requires payment for their goods or services, and (party 2) an importer who wants to make sure they are paying for the correct quality and quantity of goods.
Smaller businesses often have very limited access to loans and other forms of interim financing to cover the cost of goods they plan to buy or sell. Even with a confirmed order for products, many banks won’t provide loans or overdraft protection for these types of transactions.
Business owners, both small and large, don’t want to have their own money tied up in shipments of goods that could, for example, take four to six weeks or more to arrive from an overseas manufacturer.
On the flip side, companies that export large amounts of goods can’t necessarily afford to wait until their export products have arrived at some distant destination weeks later, before receiving payment. Some sources estimate that over 82 percent of global trade depends on trade financing, which helps goods keep moving even when companies don’t have enough cash flow internally to finance the transactions themselves.
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;
- Letter of credit
- Supply chain finance
- Export and agency finance
- Structured trade and commodity finance
- Trade credit and political risk insurance
What does Zenith, LLC do for commodity traders?
When your business is growing rapidly and becoming more international, your financing needs will increase and you will face new risks. We offer a range of trade finance services designed to help you finance growth and manage new risks efficiently.
We provide various types of facilities that allow buyers/traders to fund their trades. Our front end financing includes the following:
- Credit Finance
- Pay Suppliers Direct
- Letters of Credit
- Bank Guarantee / SBLC
- MT-799 POF
- Joint Venture
The financing is bespoke to the individual production, delivery and payment cycle of each trade. It can be for spot deals or revolving basis.
- Customer places order, sign a contract with the supplier
- We place the right financial instrument to pay the supplier
- We either provides a loan to buy, or makes payment to the supplier or provides guarantees such as a letter of credit or bank guarantee
- The supplier delivers the goods
- We release payment to the supplier
- Customer settles Zenith, LLC facility / the guarantee expires
Each trade is unique, so we cannot be too prescriptive in the criteria for such financing solutions. We are flexible and creative. We can structure a solution to meet your requirements.
Trade Finance Solutions
The Trade Finance team and the investors are working together for a common purpose within pre-export, shipping finance, and Export Credit Agency backed finance to deliver a comprehensive solution based offering to all of our customers, however large or small. We provide Guarantees and similar trade finance instruments.
Commodity finance aims to provide mature over a relatively short period of time, self-liquidating finance facilities to a range of trading companies from the mid-sized specialist product trader to the globally-integrated major trading houses, offering a range of traditional or bespoke commodity-finance solutions using a BG, DLC or LC at sight.
We always welcome your feedback about our service – whether you found it friendly and helpful, or whether it fell short of your expectations. Please Contact Us with your comments and we’ll respond as soon as possible.