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Sourcing and Supply Stage (Non-funded)
A Bank Guarantee is a unilateral contract between the bank as a guarantor and the customer as a warrantee, in which the bank undertakes to make payment to a specified beneficiary within limits of a stated sum of money in the event the customer/warrantee fails to perform an obligation.
A bond (also known as an insurance guarantee ) is a unilateral contract in which the guarantor undertakes to make a payment to a specified beneficiary within certain limits of a stated sum of money when the third party (contractor/supplier) fails to perform an obligation as per the terms of the contract. The bank in this case becomes the guarantor.
A Letter of Credit (LC) facility is availed to buyers and/or importers and offers you secure payment terms to your suppliers and/or exporters abroad. The terms simultaneously ensure the prompt delivery of your goods and services and in the condition expressed. Once the contract and/or delivery has been fulfilled as required, payment is then released to the supplier/exporter. The LC can be local or international.
This is a method of payment that allows Credit Bank to handle import or export documents (Financial or Commercial documents) in accordance with instructions issued and received. Documentary Collection is a transaction whereby the exporter entrusts the collection of payment to the remitting bank (exporter’s bank), which sends documents to a collecting bank (importer’s bank), along with instructions for payment. That is, the documents will be delivered either against payment, against acceptance or on other terms and conditions as agreed between buyer (importer) and seller (exporter).
This is undertaking by Credit Bank on behalf of the importer, to honour, payments of Bills of Exchange or drafts from the supplier. This undertaking is similar to that of a Letter of Credit and hence provides the same comfort to the supplier but with an easier structure for the importer. This is applicable to both domestic and international trade.
Financing Stage (Funded)
Simply referred to as LPO Financing, this financing gives your business much needed working capital based on the reputation of both your business and the organisation you are supplying goods and services to…
Also referred to as Pre-Export Finance, is issued when your supplier (the seller) wants the payment of the goods before shipment. The main objectives are to enable you (the exporter) to:
- – Procure raw materials
- – Carry out the manufacturing process
- – Provide a secure warehouse for goods and raw materials
- – Process and pack the goods
- – Ship the goods to the buyers
- – Meet other financial cost of the business
Sometimes your business manages to complete an order for its client way ahead of schedule. At other times, your client may have a credit policy of say 60 days. This presents liquidity challenges for especially for small and medium sized enterprises.
Liquidity challenges are a part of small and medium sized business operations. Import Loans allows you access to short-term cash in advance to enable you (the importer) to meet your immediate payment obligations. Under such arrangements, Credit Bank finances your import commitments by making payment against the Letter of Credit or Documentary Collections and we then receive that payment from you at a predetermined date in the future.
Export Loan
If you are in the export business, liquidity challenges may arise from time to time. At Credit Bank, we provide you (the exporter/seller) with access to working capital finance in the form of an Export Loan prior to shipment or delivery of goods. A facility can also be provided against evidence of shipment of goods or supplies made to the importer.
Your business can be able to raise additional working capital using stock/inventory. Credit Bank avails this financing to businesses with the aim of assisting you to increase sales volume and capitalize on other expansion opportunities.
A guarantee is a unilateral contract in which the guarantor undertakes to make a payment to a specified beneficiary within certain limits of a stated sum of money when the third party (contractor / supplier) fails to perform an obligation as per the terms of the contract. The Insurance Agency in this case becomes the guarantor
Not all solutions we give as Credit Bank can fit your business’ needs. That’s why when you come to us, we take the time to understand your business’ needs and offer you tailormade solutions. These provide you with credit enhancement structures through which capital solutions are provided outside the traditional fall back on securities.
The Trade Finance Journey for Your Business
The Credit Bank Journey
