banking services

Why you need to know about trade finance – Overview

Banking services have evolved a lot since the time of its inception. That is why you can find a plethora of services at Axios Credit Bank. On one hand, you can take the benefit of online business banking and on the other hand Trade Financing by Axios can help your international trade business have a tremendous growth.

Whether it is a small business exporting or importing goods or it is a multinational corporation, trade finance plays a crucial role in deciding the total transaction of products. This is one of the reasons why it is of utmost importance to learn more about the functioning of trade finance. Keeping this in mind, Axios Credit Bank tries to make things clear for you with respect to trade finance.
Scroll down and you will learn the reasons for enhancing the knowledge on trade finance services in Malaysia.

Diminishes the Risk of Your Business

In order to leverage your business, you need to minimize the risks involved with it. The best way to do so is to opt for trade finance services in Malaysia. This can be done only when you have a trustworthy intermediary between the buyer and the seller.

On one hand is the buyer or the importer who wants to ensure that he receives the shipment within the stipulated time and for this, he needs easy financing. On the other hand, there is an exporter or the seller, who looks for financing so that the delivery of the product is done on time. Trade finance helps both of them by accelerating payments with the help of the letter of credit, which is issued by the bank.

Reduces the Pressure of your Business

As a business organization in an international trade, you need appropriate support that relieves your stress of payments. Axios Credit Bank understands this and that is why you are recommended to select trade finance service. This bridges the financial gap between you and the other party. An importer doesn’t need to worry, as the products are sent only after getting verified by a trade financier and the exporter knows that he doesn’t need to worry about the payment default.

Trade Finance Products and Services

Apart from the above two points, trade finance also has a variety of products and services that you may avail. However, for this, you need to learn more about it.

There are three important things that you must know if choosing Trade Finance services in Malaysia:

Letter of Credit –

This is a letter in which the importer’s bank promises to the exporter that when all the shipping documents as stated by the importer’s purchase agreement is placed in front of the bank, the bank will be liable to make the payment to the exporter.

Bank Guarantee –

Here, the bank works as a guarantor for either the importer or the exporter and if anyone fails to fulfill the terms and conditions of the contract, then it is the duty of the bank to pay the declared sum of money to the beneficiary.

Forfaiting –

In exchange for cash, the exporter may sell off his accounts receivable to a forfaiter at a certain discount. This is done in the form of an agreement, where the exporter transfers to the forfaiter all the debt that he owes to the importer. The importer’s bank guarantees the receivables bought by the forfaiter.

Factoring –

Here, all the open invoices of the exporter are sold to a trade financier, also known as the factor at a discount. This way the exporter becomes free from all the risk of bad debts. On the other hand, the factor makes money when the importer makes the full payment.

If you are looking for Trade Finance Services in Malaysia, then Trade Financing by Axios is one of the best options for you. Axios credit bank offers you all types of banking services, such as online banking services, trade finance, currency exchange services, etc.

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