SUPPLY CHAIN SOLUTIONS
Collateral for Trade Finance
Comprehensive structured and trade finance solutions to help you achieve your business objectives, without the unacceptable risks.
Looking for Financing?
But no Collateral?
Let Us Help You with Bespoke Collateral Solutions For:
- Invoice Discounting
- Import Finance
- Supply Chain Finance
- Performance & Completion Guarantees
- Debt Factoring
- Export Finance
- Bid Bonds
TRADE FINANCE
Performance Bond
Capital projects and developments come with inherent risks to the developer. The reality of the industry is that contractors can often fall short of delivery in terms of the stipulated agreement.
Performance guarantees are a form of protection for the developer, as they will be provided with alternative outcomes, should the contractor fall short in their delivery. These alternative outcomes can include providing for a new contractor to take over and guide the project to successful conclusion.
COMPLETION BOND
Capital projects and developments come with inherent risks to the developer. The reality of the industry is that contractors can often fall short of delivery in terms of the stipulated agreement.
Independently financed projects carry their own forms of risk, and many projects have been negatively affected by contractors falling outside of previously agreed timeframes and budgets. By engaging with our experts, and making use of our completions guarantees, customers are able to insure against these risks and ensure that their projects are carried through to completion.
- It provides protection if the contractor runs out of money or any other budgetary issues come up during the project;
- Being able to offer such bonds and guarantees can be essential when bidding for contracts, as the failure to do so may ultimately lead to exclusion from the tendering process;
- In essence, a Performance Bond helps both the developer and contractor enter into contracts with peace of mind and acts as a surety to ensure satisfactory completion of an agreed project;
- It should be viewed as a viable alternative to Bank Bonds and Letters of Credit which often require working capital to be ring-fenced for the duration of the contract. By purchasing a Performance Bond, contractor liquidity is significantly enhanced.
BID BOND
A bid bond provides a guarantee that a winning bidder will take up the contract as per the terms at which they bid. A bid bond involves 3 parties: the obligee, the principal, and the surety. The obligee is the owner/developer of the construction project under bid. The principal is the bidder or proposed contractor. The surety is the agency that issues the bid bond to the principal.
When project owners look to various service providers and contractors for bids to fulfil particular functions, they can run the risk of awarding a bidder, only for unforeseen price adjustments to be sprung upon them. This can negatively affect budgeting and forecasts for project completion. By making use of bid bonds, the contractor’s costs can be accurately forecast and managed, as the agreed prices must be strictly adhered to.
RETENTION BONDS
This type of performance bond protects the customer after a job or project is complete. It guarantees that the contractor will carry out all necessary work to correct structural and/or other defects discovered immediately after the completion of the contract.
- It provides a fund for rectifying defects;
- It provides an incentive to the contractor to complete the project on time and without defects;
- It provides an incentive to the contractor to return to site during the defects liability period to remedy any defects or deal with snagging items.
ADVANCE PAYMENT BONDS
An advance payment or simply an advance, is part of a contractually due sum that is paid in advance for goods or services, while the balance included in the invoice will only follow the delivery.
It provides that the advanced sum will be returned if the agreement under which the advance was made cannot be fulfilled. They can also be called Advance Payment Guarantees.
As these bonds enable payment of cash to be made in advance of work being carried out they provide significant cash flow benefits to the contractor, giving them the opportunity to fabricate offsite if required and also providing a level of comfort for the beneficiary of the Bond.
COMMERCIAL CREDIT INSURANCE
Export Trade Credit Insurance – SCCE (Seguro de Credito Comercial de Exportacao) and Domestic Trade Credit Insurance – SCCD (Seguro de Credito Comercial Domestico), are designed to facilitate domestic trade transactions and export trade transactions respectively, as a risk management tool that combines the information and protection that suppliers need to mitigate the risk of losses due to non-payment by insured buyers.
- Buyer Insolvency or Liquidation;
- Prolonged Default: failure by the Insured Buyer to pay an evident debt within six months (180 days) from the due date for payment;
- Policy Risk: an event that prevents, restricts or controls the importation of goods into the country of the Insured Buyer;
- Rejection: a refusal or failure by the foreign buyer to accept delivery of goods or services without any lawful reason.
- Buyer’s insolvency or liquidation;
- Prolonged Default: failure by the insured buyer to pay an undisputed debt within six months (180 days) of the due date.
- Britam’s SCCE policy pays up to 90% of the total past due invoices in the event of the insured risks occurring; ;
- Britam’s SCCD policy pays up to 80% of the total past due invoices in the event of the insured risks.
- Provides opportunity to explore high risk business;
- Explore markets in different countries that you would normally avoid for fear of default risk;
- Protects cash flow by paying claims in the event of customer insolvency or default;
- Fees are reduced as the cost is shared proportionately between the policyholder and Britam;
- Reduces investigation costs to your providers because this exercise is now done by Britam;
- Banks tend to extend their credit line to the benefit of the policyholder on more favorable terms if their borrowers have insured credit.
INVOICE FACTORING
Invoice Factoring – where a business will raise an invoice for work completed, pass this to the debt factoring provider who then chases the payment from the debtor on behalf of their client.
The business will be given up to 90% of the invoice value almost immediately from the point of raising the invoice, therefore reducing the cash deficit for the small business.
The debt factoring company will chase the debtors for payment of the invoices and once received will give the remaining 10% to the small business, minus their fees for providing this service.
Debt factoring is proven to help businesses grow and prosper and is an excellent alternative to a bank overdraft.
- Boost your cashflow without having to wait up to 120 days for your customers to pay you;
- A debt factoring company with a revolutionary digital onboarding process, giving you quicker access to funds and the ability to take on new business remotely during this lockdown period;
- Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled;
- No need to chase your invoices, we can do it for you;
- 6 month trial period followed by a rolling contract
PURCHASE ORDER FINANCING SERVICES
An advance payment or simply an advance, is part of a contractually due sum that is paid in advance for goods or services, while the balance included in the invoice will only follow the delivery.
As these bonds enable payment of cash to be made in advance of work being carried out they provide significant cash flow benefits to the contractor, giving them the opportunity to fabricate offsite if required and also providing a level of comfort for the beneficiary of the Bond.
- Purchase order financing companies are willing to fund suppliers even if they have less-than-ideal credit scores. These lenders are more interested in the creditworthiness of the customers that send in purchase orders
- What’s more, while takes a lot of time to secure a loan from a traditional financial institution—assuming you’re lucky enough to qualify—PO loans are much easier to obtain. This is especially beneficial to newer companies that might have a large purchase order sprung on them when they’re not ready for it.
TRADE CREDIT FINANCE GUARANTEE INSURANCE
Trade credit insurance protects businesses from non-payment of commercial debt. It covers your business-to-business accounts receivable. If you do not receive what you are owed due to a buyer’s bankruptcy, insolvency or other issue, or if payment is very late, a trade credit insurance policy will reimburse you for a majority of the outstanding debt. This helps you protect your capital, maintain your cash flow and secure your earnings while extending your competitive credit terms and helping you access more attractive financing.
- With trade credit insurance, you can reliably manage the commercial and political risks of trade that are beyond your control. Trade credit insurance can help you feel secure in extending more credit to current customers or pursuing new, larger customers that would have otherwise seemed too risky.
- Peace of Mind: Feel safe in the knowledge that your outstanding invoices are protected.
- Competitiveness: It helps you remain competitive by enabling you to offer open credit when your competitors can’t.
- Profitability: Improve profitability by safely increasing your exposure to more customers.
- Funding: We help in securing trade finance which improves banking relationships and access to finance.
- Growth: It facilitates expansion with security and allows you to deal confidently with new clients and increase credit lines to existing ones,
SOLUTIONS AVAILABLE FOR:
- Local Content
- Big Projects
- Smes
- Corporates
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