The Role of Trade Financing in Copper Import

Among the five metal-producing industries, the importance of foreign trades directly relies on copper. The copper industry dominates the export and import business independently. Trade commerce plays a significant role in the marketing and production of industrial staples such as copper and silvers. Anyone new in the import and export business might need help with copper import. 

Copper Import

What Is the Importance of Trade Financing?

In the import and export transactions, trade finance makes it possible for the small business to import its product. You can import the products overseas or to multinational corporations around the globe each year.

The banks and other financial institutions oversee the financial transactions between the seller and the exporter. The copper import business gets less hectic with their help. The benefits of trade financing have helped in the growth of the international copper trading business.

Trade financing includes issuing letters of credit, lending, export credit and financing, and factoring. The trade financing involves different parties - buyer and seller, export credit agencies, financier, and insurers.

To understand the importance of trade financing in the copper business, you can consider the following points:

1. Trade Finance Diminishes Payment Risk

During the earlier days, the importers were not sure about the payment for the goods. It is because they had no guarantee about the shipping of goods from the seller.  

Trade finance has evolved all these risks. It provides payments to the exporter and promises the importers about the shipment of the ordered goods. The importer’s bank accelerates a letter of credit to make payment to the exporter.

2. Forfaiting

It is an agreement where the exporter sells his accounts receivable to a forfaitair in exchange for the cash. By doing so, the exporter settles the debt he owns to the importer.

3. Numerous Trade Finance Services and Products

To make copper import easier, the trade beneficiaries provide different services and products. It helps in meeting the expectations of various companies. 

  • Letter of Credit: 

It is a promise made by the importer’s bank to the exporter. It implies that after receiving all the documents, it will make a payment to the exporter/seller.  

  • Bank Guarantee: 

The bank plays the role of guarantor when the importer or exporter fails to maintain the contract. They take the initiative to pay the money to the beneficiary.

4. Diminishes Pressure on Both Importers and Exporters

The importing of copper involves two people - both the importer and exporter. And before the delivery of the items, both of the parties are under pressure. 

The exporter is no longer afraid of a failed payment, and the importer is sure that the exporter will send the verified goods.

Visit the Website

Pick a trusted non-banking, trade, and financial company for your copper import business. RNR Trade Corporation Company Limited has training and experience to meet your needs. They offer customized trade credit solutions to their clients. To know more and collect relevant information, visit their website rnrtradecorp.com today!

Location: Bangkok, Thailand

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