Trade finance helps companies to pay its local or overseas suppliers for the purchase of goods.. Companies also get more time to repay the bank, usually 60 to 150 days depending on the cash conversion cycle of the company.
This allows companies to increase revenue due to increased capacity to order goods. Since companies need not pay to their suppliers immediately, they get to enjoy improved cash flow.
How it works:
- You get a revolving line of credit of a predetermined limit by the bank.
- Inform the bank whenever you need to buy goods
- Bank pay directly to your supplier upon receipt of delivery order
- You pay the bank before credit due date (usually 60 to 150 days, depending on your cash conversion cycle)
Government assisted trade facilities has a maximum limit of S$10,00,000 from 1 July 2022 – 31 March 2023.
Some banks require the company to purchase a credit insurance up to the limit of the credit line.
Interest rate varies depending on the lenders's cost of financing and financial profile of the borrower.
Typically, it ranges from 6% to 8% annually, pro-rated daily.
By leveraging on the bank to finance your purchases, it makes you a more credible purchaser.
It allows you to transact with new suppliers and expand your business into new geographical areas.
Usually banks will bundle in a foreign exchange line to enable you to hedge your purchases, if you transact in foreign currency.
Who can apply:
Documents required to apply:
How long does it take to approve?
Feel free to leave us a message and we will get back to you for a chat at no cost and obligation to you.
