Universal instruments on foreign-trade funding
PrivatBank offers services to importers that allow them to avoid 100-percent prepayment to their suppliers and to get access to inexpensive financing in the short, medium and long term. The cost of this funding is much lower than standard interest rates in Ukrainian banks, due to the possibility of raising the funds at foreign banks interested in supporting their client-exporters.
Benefits for importers
- You need not spend your working capital.
- Access to low-cost financing.
- Opportunity to work with suppliers on more favorable terms of merchandise deliveries, and at lower prices.
- It eliminates the risk that the supplier will not ship goods after your payment on the contract.
Benefits for foreign suppliers
- Guaranteed payments for shipped goods.
- Increase in supply amounts.
- Enlargement of customer range due to more beneficial delivery and payment terms.
Foreign-trade tools and financing schemes
PrivatBank provides financing for import transactions of their clients using a variety of documentary methods, combining the elements of credit, guarantees and cash-payment services. It differs substantially from a common documentary transaction, as the opening of these documentary instruments is processed without the client’s cover. The choice of methods and operation schemes depends on the client's needs and the basic conditions of import contracts with their counterparties. Bank specialists will assist you in finalising the terms of the contract, that will allow you to choose the method that is best suited to you as a client.
Import financing for shipment
Provision of bank’s liabilities to supplier on payment for goods/services in the form of irrevocable documentary letter of credit or bank guarantee. If an importer use this option he has an opportunity to pay for goods delivered (or services rendered) in fact without an advance payment for the seller’s contractual obligations.
Funding deferred payment
Opening a letter of credit in favour of the supplier, executed by deferred payment or warranty, that will guarantee the importer's obligation to make payment to the supplier after the fixed time following the cargo's shipment or services provided. The importer may be able to pay to his counterpart in a more convenient time (after sale of the imported goods, the launch of the purchased equipment etc.)
Opening a letter of credit in favor of the supplier, which will be executed by payment after documents' delivery. However, at the time of submission of documents, payment by letter of credit is processed from the funds involved in the inter-bank market and the importer receives the payment's delay. Thus, for the importer there is an effect of deferred payment, despite the fact that for the supplier the situation looks like "pay-as." This service is advisable in cases when deferred payment is not acceptable for the supplier or its costs are higher than financing from banks..
General terms on post-import financing
|Period||from several months to one year
||100% of the total contractual amount
|Contractual amount||USD 100,000.00 and more|
|Currency||any free-convertible currency
||at the end of the contract, including accrued interest
|Groups of goods
|Cost of funds||is determined individually and depend on the current rate of Libor / Euribor *, the client's cover, history of cooperation.
* Euribor/Libor rate is the interest rate traded on the European and London inter-bank deposit markets in EUR or USD, respectively
Benefits from partaking trade finance tools
- Wider opportunities for trade crediting from contractors, as well as improved commercial lending options due to the risks to your company being replaced by the bank's liabilities.
- Importer financing through letters of credit and guarantee instruments is processed on a resource-free basis that greatly reduces its cost.
- Letters of credit and guarantee instruments include various additional requirements to suppliers (terms of shipment, requirements for supporting documents, etc.) and this allows for better organistion and planning of deliveries.
- This reduces risks of misconduct from your counterparties, that in the case of external financing import operations, eliminates the risk of your credit rating deterioration through the fault of your counterparties.
Thus, financial services and import operations through letters of credit and guarantee instruments provides you both a direct benefit in the form of lower financing costs and a number of additional benefits that may also be helpful to your company.
Advantages of international trade financing with PrivatBank
PrivatBank is the leader Ukrainian bank with impeccable credit history with foreign banks having 20 years of experience in the market of documentary services.
PrivatBank experts will promptly provide you with skilled assistance:
- on compiling contracts with documentary payment forms;
- elaboration of individual payment schemes through documentary instruments;
- on drawing up all necessary documents;
- on devising non-standard documentary operations.
For advice on international documentary instruments, contact the specialists of PrivatBank Head Office via e-mail email@example.com
All collections are to be forwarded to below address:
PJSC CB 'PRIVATBANK',
32 NABEREZHNAYA POBEDY STR., OFFICE 608,
49094 DNEPROPETROVSK, UKRAINE
ATTN: TRADE FINANCE DEPT.
We assume no responsibility for documents sent to any other address unless it is agreed with us by SWIFT.