Course Objectives
Trade Finance, Letters of Credit and Bank Guarantees
Course Methodology
The course uses a mix of interactive techniques, such as brief presentations by the consultant, case studies and group exercises to apply knowledge acquired throughout the course.
Course Objectives
By the end of the course, participants will be able to:
Understand trade finance fundamentals and best practices
Explore banking facilities related to trade finance
Better negotiate contracts commercial terms
Understand and utilize different types of available letters of credit
Understand and utilize different types of available letters of bank guarantee
Target Audience
Financial controllers, procurement professionals, financial analysts, business development managers, financial managers, management accountants, business analysts and treasury professionals.
Target Competencies
Understanding trade finance
Negotiating commercial terms
Securing assets and profitability
Utilizing trade finance tools to support revenues
Mitigating trade finance risks
Course Outline
Trade finance
What is trade finance?
Exporter and importer conflicting goals
Risks involved
Product and manufacturing
Transport
Commercial
Adverse business
Political
Currency
Financial
Participants in international trade transactions
Terms of payments
Critical questions in selecting terms of payment
Shipping documents
Shipping terms
Documentary collection
Documentary credit
International trade issues
Banking facilities and services for exporters and importers
Overdraft facilities
Negotiation with banks
Bills advance
Documents presented
Factoring
Loan against imports
Trust receipt facilities
Export credit insurance
Contractual relationship between contract parties
Buyer versus seller
Applicant versus issuing bank
Issuing bank versus beneficiary
Issuing bank, advising bank and beneficiary
Issuing bank, confirming bank and beneficiary
Beneficiary versus negotiating bank
Letters of credit
Transferable credit
Back to back credit
Red clause credit
Revolving credit
Standby credit
Accounting treatment
Disadvantages of the letter of credit
Letter of credit discrepancies
Terms of sale and delivery
Letters of bank guarantee
Tender guarantee
Advance payment guarantee
Performance guarantee
Warranty bond
Retention guarantee
Accounting treatment
Trade finance
What is trade finance?
Exporter and importer conflicting goals
Risks involved
Product and manufacturing
Transport
Commercial
Adverse business
Political
Currency
Financial
Participants in international trade transactions
Terms of payments
Critical questions in selecting terms of payment
Shipping documents
Shipping terms
Documentary collection
Documentary credit
International trade issues
Banking facilities and services for exporters and importers
Overdraft facilities
Negotiation with banks
Bills advance
Documents presented
Factoring
Loan against imports
Trust receipt facilities
Export credit insurance
Contractual relationship between contract parties
Buyer versus seller
Applicant versus issuing bank
Issuing bank versus beneficiary
Issuing bank, advising bank and beneficiary
Issuing bank, confirming bank and beneficiary
Beneficiary versus negotiating bank
Letters of credit
Transferable credit
Back to back credit
Red clause credit
Revolving credit
Standby credit
Accounting treatment
Disadvantages of the letter of credit
Letter of credit discrepancies
Terms of sale and delivery
Letters of bank guarantee
Tender guarantee
Advance payment guarantee
Performance guarantee
Warranty bond
Retention guarantee
Accounting treatment