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Forms and RMA

RMA Search

In order to check the RMA route. Enter the details below, to verify if an RMA route exists between us and your beneficiary bank.

RMA Search

Please note that the existence of an RMA does not guarantee your application will be accepted.

For any further query you can email on swift@londontradecapital.com

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Corporate Structured Finance

Corporate Social Responsibility

We as a company would like to offer our teams expertise in Trade Finance to new upcoming trading company’s. By providing them with a Structured Trade Finance Solution.

Our 2020 CSR objective is to create a pool of Trading companies. Who can project values such as,

  • Financial Sustainability.
  • Community Focus.
  • Product Price Competitiveness.
  • Strong Trade Footprints.
  • Encourage Young and Elder Entrepreneur.
  • Women Empowerment.
  • COVID-19 Ready.

As we will progress towards our collective goals. We would be collaborating with Local Community, Government Entities and Financial Bodies.

If you see yourself or your company adding value in achieving our 2020 CSR objective. Please email us on info@londontradecapital.com.

Looking Forward to overcome the COVID-19 Economic Challenge together as one.

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Business Loan

Customer who have a turnover of under £3m. Can also apply now by filling in the application form. Our approval ratio is 8 out of 10 Business Loans. Whether you are Local or International Customers. We understand your needs when it comes to trade finance support or a sudden need for the cash-flow situation. Our core value is customers satisfaction. So do not hesitate to contact us, if you need any information or assistance. We offer tailor-made Business loan packages. Our approval criteria differ from customers to customer.

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Reasons for Invoice Finance / Factoring

It is estimated that over 80% of world trade is conducted on open account terms.

As such, sellers may require financing for all or part of their needs.

  • Settlement by means of factoring can be defined and included within the buyer/seller contract.
  • Financing can be arranged at any time during the lifetime of a transaction.

What criteria may lead to an exporter considering factoring?

  • Pressure on cash flow due to increased demand for products.
  • Delays in receiving the settlement of invoices, despite often offering 30 or 60-day payment terms to buyers.
  • Instead of securing a bank loan for a fixed amount, factoring has no limits and factoring is not a loan.
  • The seller may be relatively new to exporting and, therefore, has no prior credit or performance history. However, clients of the company may have long payment histories and good credit scores.
  • Limited resources are available to monitor and chase for payment of invoices.
  • Use the information available from the factor to assess and search for new clients.

For further information, you can email us on info@londontradecapital.com

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£0 to £3M Turnover £10M to £15M Turnover £3M to £10M Turnover Business Together Corporate Corporate Online Services Financial Advisory Financial Advisory Services International Invoice Finance Solutions Property Management SME SME Online Services Tailor Made Lending Trade Finance Services Wealth Management

Selective Invoice Finance / Factoring

Different Types of Factoring / Invoice Finance options available.

Import Factoring:A service rendered by the Import Factor who provides buyer risk coverage to 100 % within approved revolving credit limits and collection service to the Export Factor. The Export Factor assigns the invoices of its clients to the Import Factor who becomes the legal owner of the receivables. 
Export Factoring:The Export Factor purchases invoices from its client (exporter) to its foreign buyers (importers) and pays 80-90 % in advance based on the buyer risk coverage and collection service provided by the Import Factor. After receipt of the buyer’s payment, the Import Factor immediately remits the full payment to the account of the Export Factor. If the buyer should be unable to pay and the invoice is not claimed or disputed the Import Factor is obliged to pay under approval 90 days after the due date of the invoice. 
Without recourse factoring:The Import Factor covers the risk of bad debts or insolvency of buyers, provided that no valid disputes related to the receivables have been raised. The Import Factors provides credit investigation and credit protection, collection, litigation and ledger management. 
With recourse factoring (Collection-only):The Import Factor covers the risk of bad debts or insolvency of buyers. Between the seller (exporter) and its Export Factor, it has been agreed that the seller shall re-purchase the receivables (if advance payment has been made ) for which the Import Factor was not able to collect the payments. The Import Factor provides ledger management and collections but no debtor risk coverage. Litigation can be done by the Import Factor but the Export Factor/exporter has to bear all costs related to legal action. As part of collection-only, the Export Factor can ask the Import Factor to perform invoice verifications.
Disclosed (notified) Factoring:The Import Factor sends a notification (introductory letter and assignment text suitable for the law of the country where the buyer is located) to the Export Factor who obliges the exporter to inform the buyers (importers) about the assignment of the receivables. The buyers are asked to make payment only to the account of the Import Factor. After receipt of the payment, the Import Factor immediately remits the amount to the account of the Export Factor. 
Undisclosed (non-notified) Factoring:The buyers (importers) are not notified about the assignment of the receivables. Also known as confidential or NNF-Factoring, the buyers continue to pay the invoices directly to its supplier (exporter). The Export Factor informs the Import Factor about every payment received by the exporter. Export and Import Factor have signed a supplemental agreement to the Interfactor Agreement in which a disclosure period of the assignment (usually 30-60 days after due date) has been stipulated.
Islamic Factoring:Islamic international factoring works on the basis of tamleek, exactly like the assignment in usual international factoring, with the only difference of signing the Supplemental Agreement to cover the deviations mentioned earlier. If the export factor is an Islamic one the import factor may sometimes receive an order approval request instead of a credit line depending on which Islamic financial instrument is used as a basis for factoring.

For further information, you can email us on info@londontradecapital.com

Courtesy – https://fci.nl/

Categories
Corporate Factoring Trade Finance

Factoring

WHAT IS FACTORING?

A form of receivables purchase, in which sellers of goods and services sell their receivables (represented by outstanding invoices) at a discount to a finance provider (commonly known as the ‘factor’). 
A key differentiator of factoring is that typically the finance provider becomes responsible for managing the debtor portfolio and collecting the payment of the underlying receivables. 
The origins of factoring can be traced back to business dealings in England as early as the 1400’s. Around 1620, it was introduced to the Americas by the Pilgrims and grew as an effective means for companies to increase their cash flow.

what are the main drivers for factoring as a means of settlement?

  • Sellers require payment as soon as possible …
  • Buyers wish to delay payment as long as possible … 
  • The provision of flexible financing solutions can help alleviate any concerns on both sides.
  • Normally, finance is provided for transactions payable on 30 or 60-day terms, but this can be extended to 90, or even 180 days.
  • Funding can be provided as early as 24 hours after reaching an agreement with a finance provider (a “factor”).
  • The amount of the advance can range from 70% to 90%, depending on the industry, credit history of the buyer and other criteria.
  • Is to cover an underlying trade or services transaction.
  • Often used to bridge the gap between invoicing and receipt of payment.
  • Favourable financing and pricing terms can make a product or service more competitive.
  • The factor will manage the process for the collection of funds from each buyer.

What type of industries we can assist with factoring services?

Factoring can be considered by a seller operating in any industry where goods or services are sold or provided on, mainly, 30 or 60-day terms; but other periods may be considered. The following are some of the more common industries for which companies will utilise factoring as a means of obtaining finance:

  • Logistics
  • Manufacturing 
  • Wholesale
  • Technology
  • Food services
  • Staffing agencies
  • Courier services
  • Consulting
  • Oilfield services
  • Distributors
  • Advertising
  • Office supplies

What kind of services are offered by us?

Typically, one or more of the following:

  • investigation of the creditworthiness of one or more buyers;
  • removal of credit risk;
  • collection and management of receivables;
  • 100% protection against write-offs;
  • invoice verification (i.e., to avoid fraud); and/or
  • finance by way of immediate advances against outstanding receivables.

The services offered by a factor may allow a seller to offer preferential terms to buyers.
Although a factor will like to see a consistent and continuous flow of invoices, there is no general requirement that a seller must finance all its invoices.
Agreements between a factor and a seller will usually last for 6 months to a year. More competitive rates will often be offered for the longer the agreement lasts.
Recourse and non-recourse financing. The majority of receivables are handled on a recourse basis with the seller agreeing to buy back the receivable if the buyer does not pay on the due date. In this event, the seller must cover the cost of the invoice that is not paid. Non-recourse funding could be charged at anything from 1% above the fee set for recourse financing.

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LC / SBLC Process & Procedures Trade Finance

Letter of Credit Application – Payment Method at Sight, deferred payment, acceptance or negotiation

What should appear in the settlement type field?

An indication of the settlement terms applicable to the beneficiary. This should conform to the requirements expressed in the sale contract, proforma invoice or purchase order.

If the beneficiary requires settlement “at sight”, the options are payment or negotiation. 

From an applicant perspective, and where the beneficiary has not given an indication of preference, a documentary credit available by negotiation at sight would be the preferred option. 

If a documentary credit is available by sight payment, the nominated bank is provided with access to immediate funds of the issuing bank. The applicant will be responsible for the interest costs arising between the date of the issuing bank’s account being debited by the nominated bank and the date the applicant’s account is debited.

If a documentary credit is available by sight negotiation, the beneficiary has a choice of receiving immediate funds (in which case it is responsible for the payment of interest), or to await the remittance of proceeds by the issuing bank. The applicant’s account will only be debited on the date that the issuing bank provides reimbursement to the nominated bank.

Main UCP considerations

Sub-article 6 (b) requires that each documentary credit indicate whether it is available by payment, deferred payment, acceptance or negotiation.

What should appear in the settlement type field?

If the beneficiary requires settlement in the future, the options are deferred payment, acceptance or negotiation. From an applicant perspective, and where the beneficiary has not given an indication of a preference when a documentary credit is to be payable XXX days after sight, an availability of negotiation at XXX days sight would be the preferred option. 

If the documentary credit is available by negotiation, the due date will be XXX days after the date the documents are received by the issuing bank. Whereas, when it is available with a nominated bank or any bank by deferred payment or acceptance, the due date will be XXX days after the nominated bank receives the documents.

When a documentary credit is to be available at XXX days after the date of shipment, date of a document or date of an event, it generally matters not which form of availability is indicated. When given the choice, a beneficiary will often prefer deferred payment or acceptance.

Main UCP considerations

Sub-article 6 (b) requires that each documentary credit indicate whether it is available by payment, deferred payment, acceptance or negotiation.

Categories
LC / SBLC Process & Procedures Trade Finance

Letter of Credit Application – Available with Which Bank

What should appear in the bank field?

The bank to whom the beneficiary may present its documents for payment, deferred payment, acceptance or negotiation (when other than the issuing bank, this bank is referred to as the nominated bank). When the nominated bank is the advising bank or any bank, the beneficiary also has the choice of presenting its documents directly to the issuing bank.

When this field indicates that the documentary credit is available with any bank, the beneficiary may present its documents to any bank. The scope of the term ‘any bank’ will be narrowed by the inclusion of the name of a city or country as part of the expiry date details referred to earlier in this module, in which case it is any bank in the named city or country that may pay, accept a draft, incur a deferred payment undertaking or negotiate.  

Wherever possible, situations should be avoided where the place of the bank with which the documentary credit is to be available is different from the place of expiry. 

Main UCP considerations

Sub-article 6 (a) indicates that a documentary credit must state the bank with which it is available or whether it is available with any bank.

Sub-article 6 (b) requires that each documentary credit indicate whether it is available by payment, deferred payment, acceptance or negotiation.

Categories
LC / SBLC Process & Procedures SBLC Trade Finance

STANDBY LETTER OF CREDIT ISSUANCE PROCESS

How Standby Letters of Credit Work

The numbering is commensurate with that shown in the extract below.

1. As with any other trade transaction, an underlying sale contract is agreed between the exporter (seller) and importer (buyer). For the purpose of our example, the contract provides for settlement to be made in an agreed manner and for the issuance of standby to act as security for the exporter in the event of non-payment by the importer, despite the exporter complying with the conditions of the contract.

2. The importer applies to its bank for the issuance of standby in favour of the exporter.

3. Assuming the bank is willing to proceed, e.g., a credit facility exists for such issuance, the standby is issued and advised through a bank in the country of the exporter. At this point, the exporter is referred to as the beneficiary of the standby, and the importer is referred to as the applicant.

4. The standby is advised to the beneficiary. If confirmation has been requested, and added, this will form part of the advice that is sent to the beneficiary.

At this point, the beneficiary should ensure that the conditions of the standby reflect suitable security for it to proceed to perform under the contract. The standby is held by them as security, in the event it becomes necessary to make a claim thereunder.

For example, the standby should (a) be for the amount that may become due under the sale contract; (b) have an expiry date that extends beyond the completion of the contractual terms, including any period in which the applicant would be required to pay by the agreed means; and (c) clearly indicate the document(s) that is/are to be presented in order to demand payment thereunder.

Different Types of Standby

We can assist you with a wide variety of types of Standby Letter of Credit. This are more commonly seen in trade finance transactions. Common Ones are listed below. Most of these will be familiar to those acquainted with demand guarantees.

Performance – agreeing to undertake, deliver and/or complete contractual obligations. 

Advance Payment – undertakes repayment of all or part of a percentage of the value of a contract that has been paid by the beneficiary to the applicant as a down payment, advance payment, or deposit, upon the signing of the contract. 

Bid or tender bond – ensures a bidder (applicant) cannot alter its tender proposal, or withdraw from the tender process before the tender is awarded.

Counter – a standby issued by one bank, in favour of another bank, to support the issuance of a standby, guarantee, documentary credit or other forms of the undertaking, by that other bank.

Financial – supports a financial obligation to pay or repay.

Insurance – reinforces applicant obligations with respect to insurance or reinsurance activity.

Direct-pay – not necessarily related to default and is likely to be the primary means of payment rather than secondary which is normally the case. 

Commercial – acts as a security for payment of goods or services not settled by a buyer under other arrangements i.e., via open account trading or documentary collection.

Benefits and attributes of a Standby

  • A standby is often used to cover, and to mitigate, the many risks that can occur in finalising a contract between a buyer and seller. The benefits and attributes of a standby include: 
  • Independence from any underlying contract.
  • Provision of security.
  • Protection against non-performance of obligations, as opposed to a performance which results in non-payment (as is covered by instruments such as documentary credits i.e., with the shipment of goods and presentation of complying documents).
  • Can cover financial or non-financial obligations.
  • Can be used for cross-border or domestic transactions.
  • Contains many of the characteristics of a documentary credit e.g., independent from the underlying contract, payment made only if certain conditions are fulfilled, issued by banks, subject to a set of international rules.
Categories
LC / SBLC Process & Procedures SBLC Trade Finance

Incoterm categories

There are 11 Incoterms, which are for use in domestic and international transactions.

Each one sets out the obligations of the seller and buyer under the sales contract and indicates the point at which responsibility is transferred from seller to buyer. The seller’s obligations escalate from EXW (‘ex-works’ – the minimum) to DDP (‘delivered duty paid’ – the maximum).

Any obligation that does not appear in a particular Incoterm is the responsibility of the buyer unless the sales contract states otherwise.

The 11 Incoterms are divided into two groups: seven that are suitable for any mode or modes of transport; the remaining four applying to sea or inland waterway transport only.

When incorporating an Incoterm into a sales contract, the seller and buyer should take care to ensure that the term selected is appropriate to the agreed point of delivery and the mode of transportation to be used.

SBLC Trade

The 11 Incoterms are grouped as follows:

◆◆ Group 1: Rules for any mode or modes of transport

–– EXW (‘ex-works’)

–– FCA (‘free carrier’)

–– CPT (‘carriage paid to’)

–– CIP (‘carriage and insurance paid to’)

–– DAT (‘delivered at terminal’)

–– DAP (‘delivered at place’)

–– DDP (‘delivered duty paid’)

◆◆ Group 2: Rules for sea or inland waterway transport only

–– FAS (‘free alongside ship’)

–– FOB (‘free on board’)

–– CFR (‘cost and freight’)

–– CIF (‘cost, insurance and freight’)

Applying the appropriate Incoterm, and the applicable transport and insurance document requirements. The Incoterms are set out in a logical order under each grouping, starting with the term that imposes the least obligation on a seller and ending with that which imposes the most.

Sellers and buyers are advised to review the full content of ICC Publication No. 715 once an Incoterm has been identified so that they understand its full implication and the obligations that it imposes. Irrespective of the chosen Incoterm, the buyer pays for the goods according to the terms of settlement agreed in the sales contract, proforma invoice or purchase order.

Courtesy – ifs University College 2015