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Hommocks | Trade Finance

Trade Finance:

Seller of commodity

Seller

End-buyer of commodity

Buyer

Payment

Product

A timing difference always exists between when a product is delivered and when a payment is made (unless when paid in cash).  Trade finance intermediates and moderates this timing gap.  This timing gap can be from a few days up to multiple years.  Trade finance's deal duration occurs during this timing gap period, typically within 120 days.  

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Trade finance can be used by a Seller such as in receivable finance, inventory finance or pre-export finance.  By a Buyer, payable finance can be used.  By both a Seller and a Buyer simultaneously, documentary letter of credit can be used.       

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Unlike a corporate loan in which two parties (borrower and lender) are engaged, trade finance requires three parties (seller, buyer and lender).

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The Seller's main interest is to receive payment safely on the shortest possible payment term.  The Buyer's main interest is to receive non-defect goods on the longest possible payment term.  Trade finance moderates these two differing interests.    

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The Borrower of trade finance achieves better working capital management and increased efficiency in short term assets (receivables and inventory) and liabilities (payables). The Borrower also can mitigate counterpart risk.  View more on Borrower Benefits.

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Hommocks LLC

Mamaroneck, New York, USA

Cell/Text: 914-414-2171

jun@hommocksfinance.com

www.hommocksfinance.com

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Nothing on the site is an offer or solicitation to buy or sell any security. Although the site may include investment-related information, nothing on the site is a recommendation that you purchase, sell or hold any security or other investment, or that you pursue any investment style or strategy. We do not give any advice or make any representations through the site as to whether any security or investment is suitable for you or will be profitable.

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