“KAPITALBANK” JSCB renders a wide range of services in the field of trade finance.
TRADE FINANCE — is a complex of banking products and services for servicing trade contracts for arranging settlements, financing transactions and monitoring cash and commodity flows on the part of the serving bank.
Trade finance operations provide our customers with the opportunity to:
- use trade finance instruments to gain access to alternative lending sources in the form of payment deferrals or long-term financing, which is essential during a crisis period;
- minimize the risks associated with non-delivery of goods;
- reduce the share of advance payments;
- minimize the costs of a foreign trade transaction;
- enhance business transparency and expand the opportunity to enter the world markets for goods and services.
BASIC TRADING FINANCE INSTRUMENTS OFFERED BY THE BANK:
Letters of Credit:
- Confirmed letter of credit with post-financing;
- Confirmed letter of credit with discounted deferred payment;
- Direct (unconfirmed letter of credit) with deferred payment.
- Payment guarantee;
- Advance payment refund guarantee;
- Loan repayment guarantee
Targeted loans insured by export credit agencies (ECA).
Letter of credit — is a monetary obligation of the bank, accepted in reliance upon the order of the customer-buyer to make payment in favor of the seller after the latter has submitted the documents stipulated by the terms of the letter of credit.
Uncovered letter of credit – is a letter of credit without collateral in the currency of the letter of credit. Uncovered letters of credit are not only a standard method of settlements under foreign economic contracts in the majority of countries, but also represent an efficient instrument for financing transactions.
Deferred payment L/C is a documentary document of credit for which payment is made on a future date determined in compliance with the letter of credit. This type enables the importer to receive a deferred payment, but at the same time, the exporter can discount documents in cases of their compliance with the terms of the letter of credit, thereby receiving funds upon presentation.
In case of impossibility to obtain a deferred payment from the exporter (a commercial loan under a trade contract), “Kapitalbank” JSCB offers its customers-importers the opening of letters of credit with post-financing.
Post-financing – is a form of attracting financing from foreign credit and financial entities, in which, within the framework of an opened letter of credit, the financing (executing) bank pays for documents to the exporter after they have been submitted in compliance with the terms of the letter of credit, followed by a deferred payment for an agreed period.
Settlement scheme for letter of credit under post-financing condition
* Confirming, executing, financing
- Contract for the supply of goods (services).
- Agreement on opening a letter of credit under a post-financing condition.
- Letter of credit in favor of the exporter
- Supply of goods (services).
- Documents under the letter of credit.
- Payment under a letter of credit, deferral of repayment of obligations under a letter of credit (financing).
- Deferral of repayment of obligations under the letter of credit.
- Repayment of obligations under the letter of credit.
- Repayment of financing obligations.
Bank guarantee — is an obligation of the bank-guarantor issued on behalf of the customer (and at his expense) to pay the recipient of the bank guarantee (beneficiary) a sum of money in compliance with the agreement between the customer and the recipient. Payment is made upon submission of a written request from the recipient, as well as additional documents specified in the bank guarantee.
Standby (reserve) letter of credit - is a documentary letter of credit which can be used by the beneficiary only in case of default on the transaction to which it relates. The standby letter of credit acts as a guarantee if there is a default on contractual obligations. Initially, standby letters of credit evolved because US law limited the banks’ rights to issue guarantees.
OUR OPPORTUNITIES TI FINANCE IMPORTS
SHORT-TERM FINANCING (up to 1 year)
Letters of credit with post-financing / discounting / deferred payment option
used to finance the supply of raw materials, goods, consumables, spare parts, various types of equipment
MEDIUM-TERM FINANCING (from 1 up to 3 years)
Letters of credit with post-financing / discounting / deferred payment option + conversion into a loan
used to finance the supply of various types of equipment with a maturity of not more than 3 years
LONG-TERM FINANCING (from 3 up to 5 years)
Loans to the buyer under the insurance of export credit agencies (ECA) of the exporting country
used to finance the import of equipment with a long payback process and production
Basic requirements to the Borrower:
- Place and registration of business in the regions where “Kapitalbank” operates;
- Availability of collateral;
- Absence of negative credit history and facts of default on obligations