Trade finance has become increasingly common in the United Arab Emirates, and most international and local banks offer services to SMEs, allowing them to trade with international and local markets. We at Mustufa Yusuf Commercial help you to get the trade finance in UAE easily and effectively without any obstacles.
Trade Finance in UAE
Trade finance represents the financial products and instruments that are used by companies to facilitate commerce and international trade. Trade finance makes it easy and possible for exporters and importers to transact business through trade. Trade finance is an umbrella term which means that includes several financial products that companies and banks use to make trade transactions possible. These includes:
- Purchase Order Finance
- Stock Finance
- Structured Commodity Finance
- Invoice Finance
- Supply Chain Finance
- Bonds and Guarantees
Benefits of Trade Finance in UAE
Trade finance in Dubai will help in the growth of the business by obtaining financial support from the banks and other financial institutions, which is necessary to operate the business activities of a trading company.
Trade finance would support businesses that don’t have the sufficient cash flow or working capital to complete the business requirements. Trade finance will relieve from a cash crunch, blocked money on unsold inventory, and extend the credit period of clients, to a fixed extent.
Trade finance, based on some pre-agreed terms, will help the business to provide a more competitive price and conditions to the customers and suppliers by ensuring timely guarantee payment to the suppliers. This would also support the business from cash shortages or liquidity gaps by providing options of overdraft, terms loan, customer invoice discounting, etc.
Trade finance in UAE will give permission the businesses to buy inventories in bulk quantities, providing negotiation and higher than commercial benefits, and volume discounts that will increase profitability. Trade finance also helps the business to make a strong customer/supplier rapport because the payment risk is minimized to the maximum extent.
Facilities of Trade Finance in UAE
- Overdraft Facility: This is a financing facility that help the business plan expenditure, payments, raw materials and cost of capital, access to fund to pay monthly expenses such as utility bills. In case of possible shortfall in cash, a company may use this option.
- Trust Receipt Financing: A trust receipt is a type of short-term loan for goods imported under a letter of credit. Trust receipt financing is the best option for purchase.
- Letter of Credit: It is a letter and a guarantee issued to the seller from the bank, guaranteeing that buyers will receive the payment on time by the seller with the correct amount. All letters have clarity and are on the same page to ensure that they are on the same page.
- L/C Discounting: This is a form of short-term loan by the bank to the seller. Through a discount, a seller is paid immediately, even if a buyer wants to keep the credit period.
- Cheque Discounting: In case, customers can take cash from the bank on the security of past-dated cheques received from customers. Banks provide this facility only when they are fixed that they will receive the amount from the customer on the stipulated date.
- Local Bill Discounting: A customer can pledge its local receipt to the bank and get an instant cash facility in exchange for managing daily operations. The receivables are treated as collateral and the bank offers the customer a pledged amount at the agreed interest rate.
- Bank Guarantee: In business, sometimes a situation can arise when a customer asks to do business through a financial guarantee or a letter of credit from a third party.
- Project Financing: This is playing an important role in financing development projects worldwide. All types of projects are being financed worldwide, including power plants, chemical processing plants, transportation structures, telecommunication infrastructure, and manufacturing plants.
We at Mustufa Yusuf Commercial will help you in arranging these all facilities of trade finance in Dubai.
Key Reason to Consider Mustufa Yusuf Commercial
Mustufa Yusuf Commercial provides a comprehensive service in Dubai. we have a team of qualified and skilled professionals who went through this process many times. We provide the best services of Trade Finance in UAE and make your process efficient.
It is important to make a case for financing a project through a banking consultant who a sound knowledge and expertise. A taster can help you prepare your case to secure project finance in Dubai and anywhere in the UAE.
Frequently Asked Question on Trade Finance
What is trade finance means?
Trade finance represents the financial tools and products that are utilized by a corporation to feature international trade and commerce. Trade finance makes it possible and smoother for importers and exporters to transact business through trade.
What are the types of trade finance?
There are majorly five kinds of trade finance that are – payment in advance, working capital loans, overdrafts, factoring, and Forfaiting.
How do you get trade finance?
In order to get trade finance, there is a little process that you have to complete with essential documents. You need to connect with the Mustufa Yusuf Commercial to know about the process and get assistance from these experts during the process.
What are the 3 elements of trade finance?
The major three elements of trade finance are comprising – invoice discounting, export credit, and insurance. To know more you can connect with the Mustufa Yusuf Commercial.
Is trade finance a good career?
Trade finance is usually a huge enough vertical in its own right to give sound career development possibilities. This is wholly possible to move in and out of different corporate banking roles, but in case you’re truly an expert in your sector, you will be better served by sticking to what you know.
What are the benefits of trade finance?
There are several benefits of trade finance that comprise – flexibility, convenience, security, and Transaction flow.
