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Pre-shipment financing

14/05/2016 09:24 AM
Inventory financing

​​​Inventory financing is a trade finance solution in which the exporter (the owner of the commodities) is funded by Vietcombank from the time the commodities are stored in a warehouse until post-shipment.

With inventory financing, you can use your stored commodities as collaterals to borrow and repay when the sales proceeds are paid by the importer to your account at Vietcombank.

Benefits

  • Get financed ​​from the time the commodities are stored until they are shipped to the importer;
  • Have easier access to finance as the financing decision is based on transaction quality and performance besides your financial status;
  • Allow you to wait for better market conditions to sell the commodities at higher price.
Red-clause L/Cs

​Red clause L/C is a special payment instrument, which is used to finance the seller (the beneficiary). In which, the issuing bank or the nominated bank advances a certain percentage of the total value of the L/C to the beneficiary. 

Previously, red clause L/Cs were used in some countries in certain industries such as wool or cotton trade, where the sellers needed pre-shipment finances to buy the goods.

Nowadays, this instrument is used in some industries where the buyers’ position is lower than that of the sellers; or the buyers, in view of the relationship, want to support the sellers with advances.

Benefits

The seller

  • Get advances to buy materials and produce goods;
  • Ensure that the produced goods have already been sold.

The buyer

  • Maintain good relationship with the seller;
  • Enhance competitiveness in the market where the seller has dominant position.
Fees
Pre-shipment financing
Loans
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