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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

10/20/2015
TF 1-2

An Introduction to
Trade Finance
The
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an export transaction between Canada and the
United States,

2.

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

3.

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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