Overview
Trade finance bridges the gap between exporters who need payment assurance and importers who require time to pay. Black Diamond Group provides comprehensive pre-shipment and post-shipment finance structures, supporting clients engaged in cross-border trade of goods and commodities.
Our solutions are built on internationally recognised rules and standards including UCP 600 (Uniform Customs and Practice for Documentary Credits), URC 522 (Uniform Rules for Collections), URDG 758 (Uniform Rules for Demand Guarantees), ISP98 (International Standby Practices), and Incoterms 2020.
Our Trade Finance Solutions
Pre-Shipment Finance (Packing Credit)
Short-term working capital provided to exporters to purchase raw materials, manufacture goods, and prepare shipments. Typically secured against confirmed export orders, letters of credit, or purchase orders.
- • Tenor: 30-180 days
- • Security: LC, confirmed PO, export contract
- • Use: Raw materials, production costs, packaging
- • Repayment: From export proceeds or LC payment
Post-Shipment Finance (LC Discounting)
Immediate liquidity for exporters holding documentary credits or confirmed export documents. The exporter discounts the LC or shipping documents and receives cash upfront, minus discount fees.
- • Tenor: Matched to LC maturity (sight to 360 days)
- • Security: Irrevocable LC, confirmed documents
- • Use: Working capital, next order financing
- • Repayment: Automatic from LC proceeds
Purchase Order Finance
Finance extended to suppliers or traders to fulfil large purchase orders, particularly when the order value exceeds their working capital capacity. Structured as advance against confirmed PO from creditworthy buyer.
- • Tenor: Aligned to manufacturing and delivery cycle
- • Security: Confirmed PO, buyer creditworthiness
- • Use: Inventory purchase, production costs
- • May include credit insurance or buyer guarantee
Receivables Finance (Factoring & Forfaiting)
Purchase of trade receivables at a discount, providing immediate cash to the seller. Forfaiting typically used for medium-term receivables (1-5 years) backed by bank guarantees or promissory notes.
- • Factoring: Short-term, revolving (30-90 days)
- • Forfaiting: Medium-term, non-recourse (1-5 years)
- • May be with or without recourse
- • Suitable for both single invoices and portfolios
Supply Chain Finance (Payables Programmes)
Also known as reverse factoring, allows buyers to extend payment terms while suppliers receive early payment. Typically structured through a platform with the buyer's credit supporting the financing.
- • Benefits buyers: Extended DPO, improved working capital
- • Benefits suppliers: Early payment, lower discount rates
- • Technology-enabled platforms for invoice management
- • Suitable for large corporates with multiple suppliers
Documentary Collections
Bank-mediated payment mechanism where the exporter's bank forwards shipping documents to the importer's bank, releasing them only upon payment (D/P) or acceptance (D/A). Governed by URC 522.
- • Lower cost than LCs
- • Suitable for established trading relationships
- • Less security than LCs (no bank payment undertaking)
- • Commonly used for intra-group or repeat trade
International Standards & Rules
UCP 600 (Uniform Customs and Practice for Documentary Credits)
The most widely used set of rules for letters of credit, published by the International Chamber of Commerce (ICC). Defines the rights and obligations of banks, exporters, and importers in LC transactions, including document examination standards, timelines, and discrepancies handling.
URDG 758 (Uniform Rules for Demand Guarantees)
ICC rules governing bank guarantees and standby letters of credit used in trade. Ensures that demand guarantees are honoured upon first demand and complying presentation, independent of the underlying commercial contract.
ISP98 (International Standby Practices)
Rules specifically designed for standby letters of credit, particularly in North American markets. Complementary to UCP 600 but tailored for standby LCs which function as payment guarantees rather than trade payment mechanisms.
Incoterms 2020
Standard trade terms defining the responsibilities of buyers and sellers regarding delivery, risk transfer, and cost allocation. Common terms: FOB, CIF, CFR, DDP, FCA, ExW. Critical for determining when payment obligations arise and who bears shipping risks.