Trade Finance
Candlefocus EditorTrade finance involves both raising capital and managing risk. With the right instruments and services, companies can finance their merchandise, manage the risk of non-payment, insure against losses, facilitate payments and enforce contracts. These activities are used to offset some of the risks associated with conducting international trade.
Trade finance instruments include letters of credit, documentary credits, export finance, letters of guarantee, and credit risk insurance. They are designed to mitigate the risk of non-payment or late payment, or the risk of foreign exchange translation.
In addition to these financial instruments, Trade finance services also offer companies a variety of risk management strategies, including credit insurance, trade information services, financing for working capital, currency risk management, and export finance.
Overall, Trade finance is an important and complex part of the international economy. By helping to reduce some of the risks associated with foreign trade, it has helped create a global exchange of goods and services. This has enabled companies, both large and small, to take advantage of new opportunities and expand their global reach, increasing their revenues and profits.