Written by Milan Choo
Preparation of trade finance documentation for purpose of submission to banker is generally not difficult as compared to the “pre-work”. After the “pre-work”, you would already know what are the terms and conditions such as selling price of product, estimated time of departure, estimated time of arrival, quantity of product, and so on.
Very often, it is the “pre-work” that kills.
“Pre-work” is a stage where you negotiate for various terms, be it prices, quantity, or shipping terms – with your supplier or customer. If you were the supplier, you may prefer FOB shipment terms because that means lesser hassle to you, but the customer may want CIF as shipping terms. So the question arises now as to how do you come to term with that.
In some cases, if you were the customer, you may want extended warranty for the product that you decide to ship in; and as supplier, you may want a bank guarantee/ standby letter of credit from your customer before you decide to confirm the deal.
Hence, if you pay attention to the “pre-work” and settle it smoothly, the preparation of trade finance documentation should be a breeze to you.
How can Beyond Solution Malaysia assist you?
- Speak to us if you want to inquire further in relation to trade finance processes.
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