What Services Fall Under Structured Trade Finance?
Even after financial crises, the share of world trade in GDP is higher today than it was twenty years ago. Such volume of world trading requires financial services to ensure integrity and efficiency.
One such service umbrella includes structured trade finance products. These are used in the commodity sector by traders, producers, and processors.
Banking corporations can tailor arrangements based on the needs of the client. Structured trade finance products and services are used throughout the supply chain. This helps to ease trading activities.
Think you and your business are ready to reap the benefits from these trade finance services? Keep reading below for an overview and to find out what exact services are available!
A Few Basics
STF is a type of debt finance. It is often used as an alternative to conventional lending. STF is common in developing countries and cross-border transactions. These services contribute to the large growth seen in international trade over recent years.
Developments in international markets open up new opportunities and growth potential. They also pose many possible challenges. This is why such services are important when dealing with international trade.
Structured Trade Finance Risk Mitigation
When delving into international trade, you must be conscious of differing politics, laws, and accepted norms. Risk mitigation services can help you plan for these things.
It is important to find a business partner that can help you navigate India’s market with skill. They can help you file proper forms and bring a great level of expertise to your business decisions.
In planning for potential risks, having a backup plan is also important. While you plan out your business model, be aware of losses you could suffer. Set clear goals and baselines in order to track and predict your progress.
Trade Dispute Resolution
Handling disputes comes with the nature of international trade. The World Trade Organization plays a crucial role in this process. Without a process to settle disputes and to enforce regulations, rules would have no value.
The WTO helps make world trade stable and secure.
Any country can bring a dispute to the WTO if they believe their rights are not being honored. Experts on present agreements will help make decisions.
Utilizing advanced technology in your international trade business can help handle disputes as well. This is done by ensuring everything is documented.
Interest Arbitrage Deals
Covered interest arbitrage is a trading strategy. An investor focuses on the varying interest rates in countries. They will use a forward contract to lower the risk associated with exchange rates.
This is an important part of STF.
Another common service under structured trade financing is syndicated trade loans. This is when a borrower receives a loan from a lender group. This distributes the credit risk across multiple lenders.
Now you should be familiar with some structured trade finance services. Others include trade backed FX treasury products and transaction services for SPVs.
Are you ready to get started or have additional questions? Contact us and we will be happy to assist you.