TRADE FINANCE

Imports

1.Letter of credit

Letters of Credit (LC) are used to mitigate the various risks inherent in international trade. Be it buyer’s risk, country risk or most importantly payment risk, the issuing bank guarantees payment to the supplier provided the terms and conditions of the letter of credit have been complied with. BARCLAYS BANK offers various forms of LCs including:

• Revolving Letters of credit
• Transferable Letters of credit
• Standby letters of credit
• Irrevocable letters of credit

2. Import Documentary Collections

By informing your supplier to send their shipping documents to BARCLAYS BANK, you will enjoy prompt advice upon our receipt of documents and efficient payment according to your instructions. Under documentary collections, your overseas suppliers present appropriate documentation to their bankers which are then forwarded to us to facilitate collection on their behalf. We ensure that you are advised promptly and that their instructions are carried out exactly as per their requirements. Different forms of financing can be arranged based on the presentation of appropriate documentations

3. Import Letter of credit Refinancing/import bills refinancing

This is usually applicable in instances where certain unfavourable market conditions exist on the due payment date and for one reason or another, the applicant is not able to make settlement. We can arrange to make settlement of both sight and usance import letters of credit or documentary collections on your behalf and refinance locally up to 180 days after payment date depending on your requirements. This can be applied in various instances and ultimately provides you with flexibility to manage your cash-flows.

Exports

If you are in the export business, we can help you with Export L/C advising, L/C Confirmation, L/C examination/Negotiation and Export Bills for Collections. For financing solutions, tap on to Pre-shipment Export Finance and Post-export finance solutions

• Export letter of credit advising

Benefit from prompt advising of export letter of credit from a wide international network through BARCLAYS BANK.

• Export letter of credit confirmation

Exporters may deal not only with unknown foreign buyers, but also with their banks which are less well known institutions and whose letter of credit (LC) may not be sufficient comfort. By requesting BARCLAYS BANK to confirm your export LCs, you obtain our guarantee of payment for document presented in compliance with the credit.

• Pre-shipment export financing

We provide pre-shipment finance against irrevocable letters of credit from or purchase orders in a number of currencies to allow you to trade with confidence. If you need to fulfil a sales contract but need funds to purchase raw materials or process goods for export, BARCLAYS BANK offers you pre-shipment export financing in a variety of currencies.

• Post shipment finance

Post shipment finance provides cheaper access to funds after shipment but before maturity. This can be done through negotiation/discounting and can therefore enhance your cash-flow position thus further enabling you to focus on your core business. To facilitate this, the fulfilment of all the terms and conditions under the credit is required

• Letter of credit documents examination and negotiation

BARCLAYS BANK's thorough checking standards will reassure you that your documents will not be rejected. Strict service standards are applied to ensure that your documents are negotiated and dispatched quickly.

• Export bills for collection

We send documents to an importer’s bank on behalf of an exporter and track to ensure that the payments is received from the importer’s bank and promptly credited to the account of the exporter.

Other Trade Products & Services

Guarantees/Bonds and Indemnities

With a Guarantee, a bank, as a guarantor, undertakes to pay the beneficiary, a stated sum should the third party fail to perform an obligation. BARCLAYS BANK is able to offer its clients an array of Guarantees/bonds namely bid bonds, performance guarantees, custom bonds, advance payments guarantees, retention money guarantees, shipping guarantees and maintenance guarantees applicable in different circumstances.

Invoice Discounting

BARCLAYS BANK can offer invoice discounting facilities at the request of a customer in order to improve a customer’s liquidity or working capital. Once our client forwards to us a complete list of their customers along with the outstanding invoices BARCLAYS BANK will pay the invoices to our client based on the face value of the invoice minus the discount. BARCLAYS BANK discounts with recourse to the supplier.

Bills Discounting

This facility allows an exporter to obtain an advance from the bank, thus increasing their liquidity. The advance is based on the face value of the trade bill drawn by the exporter.  The discounting can be done with recourse to the drawer or without recourse to the drawer in instances where the bill is avalised.

Avalisation of Bills of exchange

Exporters may require a third party, usually a bank, to guarantee payment of a bill of exchange drawn on an importer under a trade contract. This action is known as an "avalisation" and can be provided on behalf of the exporter upon request. By endorsing the bill on the back, the bank commits itself unconditionally to pay should the drawee default.

An "avalised" bill substitutes the bank's risk for the importers risk thus providing the exporter with assurance that payment will be met. This bill can subsequently be discounted or used to negotiate better credit terms thus can enhance the trading relationship with the importer.

Shem Bosire
Head, Cash Management & Trade Finance
E-mail: bosire.shem@barclays.com

Commercial Banking Division                                  Tel:       +230 208 90 70
8th Floor, Harbour Front Building                              Fax:      +230 210 53 58
President John Kennedy Street
Port Louis
Mauritius

 

 

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