Purpose of Trade Finance Loan
Trade Finance facilities may be availed for:
- Import of raw materials, machinery, or goods
- Export financing
- Purchase order execution
- Inventory financing
- Bill discounting
- Letter of Credit (LC) or Bank Guarantee (BG) requirements
- Working capital support for trade cycles
Types of Trade Finance Facilities
- Letter of Credit (LC)
- Bank Guarantee (BG)
- Packing Credit
- Post Shipment Finance
- Bill Discounting / Invoice Financing
- Import Finance
- Export Credit
- Buyers Credit / Suppliers Credit
Facility type depends on business requirements and lender assessment.
Eligibility Criteria
A. Business Entities (Proprietorship / Partnership / LLP / Pvt. Ltd. / Ltd.)
- Minimum 1–3 years of business operations
- Valid Import Export Code (IEC), if applicable
- Stable turnover and financial performance
- Established trade cycle and buyer/supplier relationships
- Satisfactory credit profile of business and promoters
- Compliance with statutory and regulatory norms
Documents Required for Trade Finance Loan
A. KYC & Constitution Documents
- Loan application form
- PAN Card (Business & Promoters)
- Aadhaar / Identity & Address Proof
- Business registration documents
- GST Registration Certificate
- Import Export Code (IEC), if applicable
B. Financial Documents
- Audited financial statements (last 2–3 years)
- GST returns (recent months)
- Bank statements (last 6–12 months)
- Income Tax Returns
- Existing loan details
C. Trade-Related Documents
- Purchase Orders / Sales Contracts
- Invoices
- Shipping documents
- Letter of Credit copy (if applicable)
- Export orders / Import agreements
- Any additional documents as required by lender
Key Features & Considerations
- Flexible funding aligned with trade cycle
- Short to medium-term tenure
- Competitive interest rates
- Risk mitigation through LC/BG structures
- Subject to credit appraisal and transaction verification
- Margin requirements may apply
Important Note
Sanction of Trade Finance facilities is subject to credit assessment, financial evaluation, trade transaction validation, and lender’s internal policies. Terms may vary depending on business profile, industry, and transaction size.