Reply To: What do companies in trade finance do?

[Rasvya Banu]

Companies that finance trade assist in resolving the competing needs of importers and exporters. Accelerating the receivables would be advantageous for an exporter as they need to reduce the importer’s payment risk. On the other hand, the importer would profit from credit facilities on their purchase in order to reduce the supply risk posed by the exporter. A finance company’s role is to act as a neutral third party to take on the payment and supply risks while giving the exporter expedited receivables as well as the extended credit to the importers.