If you are a businessman who is running an international business in different corners of the world, you might be aware of the situation when you need financial help for importing or exporting goods in other countries faster and easier. This is a situation where the concept of Trade Finance comes into the picture.
What is Trade Finance?
Trade finance is the collection of essential financial instruments and products that are used by financial companies to facilitate finance to global businessmen so that they could perform their international transactions with smooth, ease and comfort. In simple words, trade finance makes it easier and possible for importers & exporters to transact their business through trade. It eliminates or reduces the risks involved in an international business transaction. Trade finance is an umbrella term that means it covers those financial instruments that are being used by many banks and companies to make trade finance transactions feasible.
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There are two concerning parties in Trade Finance:
- Exporter - who needs payment for their goods and services
- Importer - Who wants to make sure that their payment is for the correct quality & quantity of goods.
