Trade Finance Case Study

Understand Trade Finance Case Study!

John owns a food products company named ‘JK Foods Private Limited’. His company is one of the leading companies in the food industry today. He started the company in 2014 and the company has been doing well since then and has grown rapidly. The turnover of his company is Rs. 50 crores now. Let’s understand the Trade Finance Case Study thoroughly.

John now wants to enter the international marketplace. He is aware of the demand for Indian food products internationally and wants to export his products across the globe. But there are several challenges in the international market. The challenge of working capital, the challenge of the surety of the payment, the challenge of the credit period, and so on. Earlier this, he had many times planned for the export, but every time he stopped because of these challenges. But this time he is very stubborn. And he was very much aware of the fact that businesses have to take risks.

John decided to take a loan from a financial institution in order to help his company enter the international market. According to his analysis, he will require Rs. 5 crores to kick start his business internationally starting with the US. He approached some financial institutions but they refused to approve John’s loans. He, unfortunately, did not have any assets or property which he can keep as collateral with the financial institution. Here he was not very much clear what kind of funding he should take to have an international jump. But he just needs the fund, maybe in a term loan, maybe in working capital or etc. The bottom line was very clear, he wanted to have funds for the business.

Financial Snapshots

Company Turnover Rs. 50 Crores
Amount Required Rs.5 Crores
Mortgage Availability No Mortgage 
Company IndustryFood Industry 
Reason For RequirementStarting Export

The First Step

While discussing this plan with one of his business colleagues, he recommended to approach Terkar Capital for financial advice and debt arrangements. After he got in touch with one of our experts. We set up a meeting with John to discuss his financial requirements. After he spoke with our executives, we analysed his business situation and recommended that he take Trade funding.

What is Trade Finance?

Trade finance is the financing of international trade flows. It reduces the risks involved in international trade transactions. This financial instrument helps you to bridge the gap between you and your export business working capital. We at Terkar Capital understand the challenges which a businessman may face and thus we make sure that you get your funding even though you do not have collateral.

How do we execute the process?

We explained the entire procedure involved in Business Trade Finance to John. Once the picture was clear on both ends, we started the procedure. The process of trade finance started when we received the Purchase Order (PO). After the purchase order was received we completed all the required documentation in relation to the export. Once the goods were shipped, the amount was released to John by the financial institution.

There is sometimes risk involved while dealing with international customers, especially if it’s the first time. When John shipped his goods he was paid almost 90% of the invoice amount. Then after the customer made the payment to the financial institution, John was paid the remaining balance.

John was also worried about the rate of interest which the financial institution would charge. Terkar Capital looked after that too! The interest was started after he received the amount until the customer made the payment. As soon as the financial institution received the payment from the client, the process of charging interest was stopped. He got a good amount of export finance as his first customers were in the US. Now because of exports, the turnover of the company is growing. Mr. John is absolutely happy with both the decisions, the decision to start exporting and the Decision to Choose Terkar Capital for financial aid.

Analysis

Business Commencement Year2014
Amount of FundingRs. 5 Crores
Total Execution Time Working Days. 
Customer Service Experience 4.4/5
Country of ExportUS

Trade Finance Process at Terkar Capital

Terkar capital is one of the best trade finance syndication firms across India. We understand the strengths and weaknesses of your business before suggesting financial solutions to you. Once our executives analyze your business and your requirements in detail, we will suggest the best financial solution for you. You will be able to enter the international market with lesser risk and better access to financial products.

From the trade finance case study, you might have clear the process. Thus, we will help you with every step including documentation, timely processing of the loan, and so on. Our transparent process and reliable working style make us one of the leading Corporate Financial Consulting firms. Once you give the responsibility to Terkar Capital, consider the job done!

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