Fitt Case Study

Satisfactory Essays

FITTskills: International
Trade Finance
Sixth Edition

Course Objectives

Define and discuss the “Four Pillars” of trade finance— payment facilitation, risk management, financing and the provision of information related to a transaction

Describe the impact of technology on trade finance

Describe the major products and services related to trade finance, including the role and requirement of each party to a transaction

Discuss the importance of export credit agencies and international financial institutions in international trade

Describe the importance of adequate planning relative to the financial aspects of international trade

TF 1-2

An Introduction to
Trade Finance
The …show more content…

an export transaction between Canada and the
United States,


an import of highly price-volatile commodities from Eastern Europe to Germany,


a component import transaction between affiliate companies operating in South America and Asia.

TF Ch 1-14

Gaining the upper hand

Trade finance as a competitive advantage:

Exporters can gain advantage by providing competitive financing as part of the sale

Increasingly, financing is expected by importers, and is part of the ‘price of entry’

Securing low-cost financing can increase the overall profitability of a transaction for both buyer and seller

TF Ch 1-15

Banks, ECAs and IFIs

Banks, financial institutions and other providers of trade finance

Export credit agencies (ECAs)

International Financial Institutions (IFIs) or multilateral programs that support confirmations of locally issued L/Cs through guarantee mechanisms
The interrelationship of these organizations is key to sustaining trade
TF Ch 1-16

Non-bank providers

Other trade service providers seeking to extend their value proposition

Focus on supply chain and Open Account

Couriers and shippers, such as UPS provide niche financing solutions; GE Capital is active in trade finance

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