Trade Finance Process
A leading manufacturer was struggling with cash flow gaps due to delayed payments from international buyers. To keep operations running smoothly, they partnered with Terkar Capital, a trusted trade finance company, to secure flexible funding. As one of the top trade finance solution providers, we structured a tailored credit facility that ensured timely supplier payments and uninterrupted business growth.
A Case Study
To understand the process of trade financing for John’s business, let’s examine the operations of Terkar Capita as a leading trade finance provider.
John owns a food products company named JK Foods Private Limited. His company is one of the leading companies in the food industry. He started the company in 2014, and the company has been growing rapidly. The turnover of his company is Rs. 50 cr. 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.
However, 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, 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.
Trade Financing Options for International Expansion
John decided to take a loan from a trade finance provider to help his company enter the international market. According to his analysis, he will require Rs. 5 cr to kick-start his business internationally, starting with the US. He approached some financial institutions, but they refused. Unfortunately, he did not have any assets or property that he could keep as collateral with the financial institution.
Here, he was not very clear on what kind of funding he should take to make an international jump. But he just needs the funds, maybe in a term loan or maybe in working capital Financing. The bottom line was very clear: he wanted to have funds for the business. Hence, John realised that trade finance providers could help him navigate the complexities of international business expansion.
Financial Snapshot
Company Turnover | Rs. 50 Crores |
Amount Required | Rs.5 Crores |
Mortgage Availability | No Mortgage |
Company Industry | Food Industry |
Reason For Requirement | Starting Export |
The Initial Step
While discussing this plan with one of his business colleagues, he recommended Terkar Capital for financial advice and debt funding arrangements. After he gets in touch with one of our experts, we set up a meeting with John to discuss his financial requirements. We recommended a trade finance solution after analysing his business situation.
How does the process of Trade Financing execute?
We explained the entire procedure to John. Once the picture was clear on both ends, we started the execution. The process of trade financing started when we received the Purchase Order (PO). We then completed all the required documentation about the export. Upon shipment of the goods, the financial institution released the amount to John.
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. Once the customer made the payment to the financial institution, John received the remaining balance.
John was also worried about the ROI that the financial institution would charge. Terkar Capital looked after that, too! The interest started after he received the amount until the customer made the payment. The financial institution stopped charging interest as soon as it received the payment from the client. 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 decision to start exporting and choosing Terkar Capital for financial aid.
Financial Outcomes
Business Commencement Year | 2014 |
Amount of Funding | Rs. 5 Crores |
Total Execution Time | Working Days. |
Customer Service Experience | 4.4/5 |
Country of Export | US |
Terkar Capital: Leading Trade Finance Provider
John, the owner of JK Foods Private Limited, a successful food products company, is determined to expand internationally despite his challenges. He recognised the need for a trade finance provider, so he approached Terkar Capital for assistance. Understanding his situation and the risks involved, we recommended a trade finance solution to bridge the gap in working capital for his export business. With no collateral available, Terkar Capital successfully met John’s funding needs.
