ITFA and TFG launch Trade Finance Guide for corporates and large businesses

The International Trade & Forfaiting Association (ITFA) and Trade Finance Global (TFG) have today launched their international trade finance guide, aimed at clarifying and defining standard definitions for trade finance products, as well as the risks, challenges and opportunities within trade finance.

Trade finance is a set of techniques aimed at mitigating and transferring trade risks to the financial sector, and/or using bank funding to enable domestic and cross border/ international trade flows.

Trade finance focuses on supporting the physical flow of goods across borders while primarily using the goods, receivables and cash generated from the trade as the principal security.

The guide, which includes worked examples and diagrams for many of the structures, covers the following:

• Introduction – The Trade Dilemma
• Examples of Providers of Trade Finance
• Users of Trade Finance
• Risks of Trade Finance
• Trade Finance products within the trade cycle
• Non-Structured Unfunded Trade Finance (Letters of Credit, Standby Letters of Credit, Demand Guarantees and Bonds and Credit Insurance)
• Non-Structured Funded Trade Finance (Factoring and Invoice Discounting Finance, Supply Chain Finance – Payables Finance, Forfaiting, LC Refinancing)
• Structured Funded Trade Finance (Pre-Export Finance, Pre-Payment Finance, Tolling, Inventory Finance, Borrowing Base Facilities, Export & Agency Finance)
• Other Techniques in Trade Finance (Islamic Finance, Syndication)

Contributors include Charlotte Prior, Nigel Atta-Mensah, Alero Arubi, Ross McKenzie and Carter Hoffman, with additional work from the Global Supply Chain Finance Forum (GSCFF) and ITFA’s Emerging Leaders Chair, Duarte Pedreira. Editors include ITFA’s Chairman, Sean Edwards and TFG’s Editorial Director, Deepesh Patel.

The guide can be downloaded from the members section of ITFA’s website, here.