Foreign currency funding comes into the picture when you borrow the amount you need in a foreign currency. Also, repay the loan in that foreign currency. There are many businesses in India today which have exposure to foreign currency. Such businesses can take foreign currency loan. The loan can be given in US Dollars, Euros, or other currencies across the world. There are various ways to take foreign currency loans. For example, you can take foreign currency funding by mortgaging your property. Generally the businesses like the export/import business, against your LC, SBLC, etc take foreign currency funding. Thus, it can be taken as a term loan or as cash credit.
The most important thing is, to get foreign currency loan, you should be exposed to foreign currency. Either you should earn or spend or both in foreign currency. It will then be convenient for you to take funding in foreign currency. If you are not exposed to foreign currency, then it would be inconvenient for you to repay your loan in foreign currency. Thus, having exposure to foreign currency is one of the most important criteria for foreign currency funding.
Foreign currency funding is essential for businesses that have exposure to foreign currency. It is convenient for them to take a loan in foreign currency. So, there is no need to convert the currency.
Trade finance includes the financing of international trade. It exists to mitigate, or reduce, the risks involved in an international trade transaction. It is the financial instrument that helps you to bridge the gap between you and your export business working capital.
Taking foreign currency finance will give you exposure to the international financial market and international financial products. Thus, you can always opt for the one which is more suitable and comfortable under regulation.
Understand the process of foreign currency funding case study.
Terkar Capital is one of the best financial firms in India. We provide hassle-free investment banking services to companies across India. We at Terkar capital will help you with the syndication of these foreign currency loans. Our executives are well trained to speed up the procedure and assist in compiling the documents. Thus, we inform and guide clients throughout the process from the application to disbursement.
If you have any questions, please do not hesitate to ask us. Please also call us or email us before visiting to make sure that you will be served with our best services.