Trade finance has become increasingly common in the United Arab Emirates, and most international and local banks offer services to SMEs, allowing them to trade with international and local markets. We at Taskmaster help you to get the trade finance in UAE easily and effectively without any obstacles.
What is trade finance?
Trade finance represent the financial products and instruments that are used by companies to facilitate commerce and international trade. Trade finance makes it easy and possible for exporters and importers to transact business through trade.Trade finance is an umbrella term which means that is includes several financial products that companies and banks use to make trade transaction possible. These includes:
- Purchase Order Finance
- Stock Finance
- Structured Commodity Finance
- Invoice Finance
- Supply Chain Finance
- Bonds and Guarantees
Benefits of Trade Finance in UAE
Trade finance in Dubai will help in the growth of the business by obtaining financial support from the banks and other financial institutions, which is necessary to operate the business activities of a trading company.
Trade finance would support businesses that don’t have sufficient cash flow or working capital to complete the business requirements. Trade finance will relieve from a cash crunch, blocked money on unsold inventory, and extend credit period of clients, to a fixed extent.
Trade finance, based on some pre-agreed terms, will help the business to provide a more competitive price and conditions to the customers and suppliers by ensuring timely guarantee payment to the suppliers. This would also support the business from cash shortages or liquidity gaps by providing options of overdraft, terms loan, customer invoice discounting, etc.
Trade finance in UAE will give permission the businesses to buy inventories in bulk quantities, providing negotiation and higher than commercial benefits, volume discounts that will increase profitability. Trade finance also helps the business to make a strong customer/supplier rapport because the payment risk is minimized to the maximum extent.
Facilities of Trade Finance in UAE
- Overdraft Facility : This is a financing facility that help the business plan expenditure, payments, raw materials and cost of capital, access to fund to pay monthly expenses such as utility bills. In case of possible shortfall in cash, a company may use this option.
- Trust Receipt Financing : A trust receipt is a type of short-term loan for goods imported under a letter of credit. Trust receipt financing is the best option for purchase.
- Letter of Credit : It is a letter and a guarantee issued to the seller from the bank, guaranteeing that buyers will receive the payment on time by the seller with the correct amount. All letters have clarity and are on the same page to ensure that they are on same page.
- L/C Discounting : This is a form of short-term loan by the bank to the seller. Through a discount, a seller is paid immediately, even if a buyer wants to keep the credit period.
- Cheque Discounting : In case, customer can take cash from the bank on the security of past-dated checks received from customers. Banks provide this facility only when they are fixed that they will receive the amount from the customer on the stipulated date.
- Local Bill Discounting : A customer can pledge its local receipt to the bank and get instant cash facility in exchange for managing daily operations. The receivables are treated as collateral and the bank offers the customer a pledged amount at the agreed interest rate.
- Bank Guarantee : In business, sometimes a situation can arise when a customer asks to do business through a financial guarantee or a letter of credit from a third party.
- Project Financing : This is playing an important role in financing development projects worldwide. All types of projects are being financed worldwide, including power plants, chemical processing plants, transportation structure, telecommunication infrastructure, and manufacturing plants.
We at Taskmaster will help you in arranging these all facilities of trade finance in Dubai.
Key Reason to Consider Taskmaster
Taskmaster commercial broker LLC, provide a comprehensive service in Dubai. we have a team of qualified and skilled professionals who went through this process many times. We provide the best services of Trade Finance in UAE, and make your process efficient.
It is important to make a case for financing a project through banking consultant who a sound knowledge and expertise. Taster can help you prepare your case to secure project finance in Dubai and anywhere in the UAE.