What Is Export Finance?

Export finance is a process of funding the exporters to facilitate their business in the global market. In simple words, it is a cash flow solution for exporters to cater to their production and other global transaction requirements including working capital. International businessmen require export finance when they want to assure the affordability of the production of goods along with an assurance of getting paid on time while sending goods to another country. We offer Export Finance as Working Capital to firms in need of Credit Line.

Our Export Finance Facility comes in several varieties and requires monthly or quarterly payments from profits or cash flow. At OceanCapital, Our Export Finance Facility is processed under Collateral Transfer and Bank Guarantees. Leased Bank Guarantees that are received under our Provider’s Collateral Transfer facilities can be used by the Recipient or Beneficiary to secure an Export Finance Credit Line with our Banks or any other AAA-rated banks. A bank typically will have no objection to offering credit against a Bank Guarantee that is received in this manner. Lending can be up to 100% of face value, less the advance of interest charged, and bank fees associated. However, typical lending rates are presumed to be between 80-90% of face value. The total term of credit for Export Finance can be for the duration of the lifespan of the Guarantee, and will not exceed the expiration. These types of Guarantees are issued under facilities worded specifically to secure Export Finance and Lines of Credit. They are issued under the ICC 758 protocol, which is a strict set of rules that cover all types of guarantees and other payments. Guarantees are readily accepted by all international and private banks under this protocol and are often referred to as Letters of Guarantee, Credit Facilities Guarantees, or Standby Letters of Credit, which are easily monetised for Working Capital to Finance Export.

What fees apply?

When applying for an Export Finance Facility via Guarantee to secure Lines of Credit and loans, interest charges will apply in addition to the Contract Fee, which is for the rental fee of the Bank Guarantee. In our experience, international bank lending rates for loans secured against high-quality security, tend to be in the region of 3% per 12-month term, possibly more. This cost will differ depending on jurisdictions and currencies. These facilities suit financial requirements for terms under 5 years or where returns are high, allowing higher expenditure on annual rates. The longer the term, the less suited Collateral Transfer facilities are and therefore we discourage terms in excess of 5 years, although they are achievable.

How can BRICS Project Finance facilitate?

BRICS Project Finance can assist its clients in raising Export Finance Credit against Guarantees of this type in the event that our clients are unable to get lending facilities from their Banks. We hold strong relationships with reputable AAA-rated banks and private equity groups holding an appetite to expand lending opportunities in this area. It should be noted however that fees will apply when utilising our Premium Provider’s Collateral and using our banking services to obtain an Export Finance Facility or Credit Lines. BRICS Project Finance can also open Export Merchant Accounts, Banking and Lending facilities for its selected clients by direct introduction to our reputable AAA rated Banks.