Trade Finance Concepts and Applications

The video introduces trade finance, highlighting its importance in bridging the finance gap between providing goods or services and receiving payment. It discusses the challenges SMEs face in accessing traditional finance and how Trade Finance Global offers solutions. The video explains how trade finance transactions work, the associated risks, and the benefits for businesses, such as improved cash flow and growth opportunities. It concludes with the requirements for obtaining trade finance and encourages viewers to reach out for more information.

What percentage of global trade relies on trade and supply chain finance?

• 50-60%

• 90-100%

• 80-90%

• 70-80%

Why might SMEs find it difficult to access finance from traditional banks?

• High interest rates

• Increased regulation

• Lack of demand

• Limited market presence

What role does a lender play in a trade finance transaction?

• Buys goods from the seller

• Funds the trade

• Sells goods to customers

• Acts as a buyer

In the example provided, what does the supplier do after receiving the undertaking from the funder?

• Requests more funds

• Cancels the order

• Ships the toys

• Changes the buyer

What is a key risk for sellers in trade finance?

• Receiving payment upfront

• Delayed payment from buyers

• Excessive stock

• High shipping costs

What can be used as security in trade finance instead of standard securities like a house?

• Personal savings

• Real estate

• Company shares

• Purchase orders

How can trade finance help a business grow faster?

• By reducing workforce

• By limiting orders

• By enabling more orders

• By increasing debt

What is one benefit of using trade finance for managing cash flow?

• Increased bad debts

• Higher interest rates

• Reduced order capacity

• Improved cash flow management

How does trade finance improve relationships between buyers and sellers?

• By increasing competition

• By reducing communication

• By limiting trade options

• By strengthening profit margins

What should businesses provide to funders for a quick assessment?

• Product samples

• Employee records

• Audited financial statements

• Marketing strategies