Trade Finance as Working Capital

Trade Finance as Working Capital

Aidan Applegarth

30 years: Commodity & trade finance

As explained in the previous video, once any risks are mitigated for the seller, he can raise finance against his expected sales receivable, whilst the buyer can raise finance against the security of the underlying asset. In this video we’ll see how trade working capital is enabled by deploying these solutions.

As explained in the previous video, once any risks are mitigated for the seller, he can raise finance against his expected sales receivable, whilst the buyer can raise finance against the security of the underlying asset. In this video we’ll see how trade working capital is enabled by deploying these solutions.

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Trade Finance as Working Capital

4 mins 56 secs

Overview

A seller can raise finance against the receivable due from his sales contracts. The more reliable the seller is in fulfilling his contracts, the more likely he can raise working capital beyond the strength of his balance sheet, thus leveraging his performance capability.

Key learning objectives:

  • How is trade working capital enabled?

  • Why might there be no recourse?

  • What are the other forms of trade finance lending?

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Summary
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Expert
Aidan Applegarth

Aidan Applegarth

Aidan spent some 30 years building up Trade and Commodity Finance (TCF) businesses for banks in the UK, Europe and Asia. He is now a consultant providing training and practical guidance to banks and other lenders wishing to develop a TCF proposition and also advises a number of Trade Finance funds on Credit and Operational Risk.

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