Trade Payable Funding

Importers seeking to:

• Improve cash flow by obtaining extended, unsecured payment terms from exporters in lieu of letters of credit or up-front cash payment
• Gain price discounts from suppliers for providing early funding of payables through Siemens First Capital
• Improve leverage through use of unsecured trade credit facilities

Suppliers seeking to:

• Improve cash flow by discounting (without recourse) accounts receivable (A/R)
• Use importer’s creditworthiness and market conditions to improve cost of export accounts receivable (A/R) finance
• Obtain 100% guarantee of importer bankruptcy
• Increase competitiveness by offering credit terms
• Improve leverage through unsecured export financing

Description

Trade Payable Funding is an unsecured working capital tool that encourages foreign suppliers to offer North American importers extended payment terms. The program assures foreign suppliers immediate, non-recourse payment once the importer confirms its obligation to pay for goods and services supplied.

Importers evidence their irrevocable payment obligation by signing a Trade Draft, an international payment instrument, which First Capital immediately discounts to the supplier. Siemens First Capital collects funds from the Importer on the maturity date of the Trade Draft.

Structure / Process

1. Importer purchases goods / services from the Supplier
2. Supplier invoices the Importer for the goods/services
3. Importer approves the supplier’s invoices and signs a Trade Draft, committing to pay for approved invoices on the agreed due date
4. Supplier requests Siemens First Capital to discount the Trade Draft
5. Siemens First Capital purchases the Trade Draft and pays the supplier the discounted amount within 48 hours
6. On the maturity date, the Importer pays the face amount of the Trade Draft to First Capital.

This Program is designed for:

• Creditworthy North American importers of goods / services;
• Foreign exporters selling to the above importers

Pricing

Depends on the volume and size of invoices and the credit quality of importers

Criteria

Minimum annual volume of: $5 million
Minimum Trade Draft value: $50,000
Minimum importer credit quality: $500,000 minimum net worth; Two years of profitability

For further information, please call (877) 897-3223 or click Contact Us.

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