Business Trade Line
Another option to provide short term financing is trade financing. Some of the common trade financing facilities provided include:
Letter of Credit (LC)
Bills of Exchange Purchased (BEP)
Foreign Exchange Contracts
Export Credit Financing
Maximum Limit Amount
RM50,000 - RM2,000,000
Flexibility to settle early, partly or fully
2% - 8% p/a
How Does Tradeline Work
Trade Finance - LC / TR / BA (Commercial Banks)
LETTER OF CREDIT (LC)
This is a major payment method in international trade because it benefits both parties in the transaction. As the buyer, you do not have to pay until the documents are received in good order. Your sellers are also comfortable because they will definitely be paid if they have complied with the terms of the LC.
TRUST RECEIPT (TR)
A form of financing for your purchases, where the financier pay your suppliers 100% of the value of the goods, so that you can take delivery promptly and defer payment for an agreed period of time.
• Advantages of using Trust Receipts:
• 100% financing, Competitive rates, no commitment fee.
• Financing for a pre-determined period that suits your needs.
• Flexibility to settle early, partly or fully.
BILLS OF EXCHANGE PURCHASED (BEP)
This provides you with immediate funds upon presentation of export/sales documents with or without Letters of Credit. This gives you instant cash in hand for other business needs while the bank collects payment from your buyer at a later date.
Advantages of using Bills of Exchange Purchased:
• Financing for both domestic and foreign sales with or without Letters of Credit.
• Advance given based on presentation of documents of sale or export.
• No minimum financing amount.
• Up to 100% financing based on invoice amount.
• Low commission charges of 0.1%, between RM20 and RM500.
BANKER'S ACCEPTANCE (BA)
The bank provides financing for importers and local purchasers so you can take delivery of goods faster to meet market demands.
Advantages of using Banker's Acceptance:
• Period and amount of financing tailored to your business needs.
• Goods can be purchased without worrying about increasing Capital outlay.
• Low charges levied. (Normally less than 5% per annum)
• You can still obtain financing for other use, even though you have already paid your supplier.
• You can combine multiple trade documents to make up the minimum financing amount of RM50 000.