TARSCO GROUP

TRADE FINANCE 

The "International Trade Finance Accounts" are almost for (3%) of global trade,  such accounts are worth  US$ 3 Trillion annually. It’s the financing of trade in a company cycle, whether you’re sending goods, services or commodities. A variety of financial instruments are used to structure this under the general terms of Trade Finance / Bridge Finance.    The International Trade Finance includes Letters of Credit, export finance and credit agencies, receivables all sort of Financial Instruments, and invoice factoring, as well as bank guarantees. There is often great confusion here, so this is where Tarsco Trade Finance provides opportunity to finance international trade transactions via a very advanced model of financing.

FINANCIAL INSTRUMENTS

Corporate Promissory Notes

Tarsco Trade Finance offers Trade Finance, Term Loans and Bridge Financing against Corporate Promissory Notes. 

Promissory Notes required from the clients:

1. Promissory Note with a bank AVAL.

2. Promissory Note without bank AVAL (Require an Insurance Guarantee as a default Insurance Guarantee). 

Promissory Notes with Bank’s AVAL

The AVAL of a Promissory Note is not a bank guarantee, nor a bank current Liability. It is a CONTINGENT LIABILITY which maybe called upon at maturity. Tarsco are bank and finance orientated professionals bringing attention to the global community the advantages of an aval'd promissory note.

  • The Promissory Notes with bank’s AVAL is an OFF BALANCE SHEET ITEM as far as the book keeping of the banks are concern. No accountant or auditors can include the Promissory Notes which is being AVALIZED by a bank into the annual report / Balance Sheet of the bank at all. As such the bank have not issued the Promissory Note, and the liabilities are not a current liabilities and it is pure Contingent Liabilities for the bank. Further, no bank can have a provision accounts made for the Promissory Notes to show the liabilities at the annual report for the AVAL

  • As far as the Law is concern, the Promissory Notes falls under Civil and Commercial Law. As such it is not a current liabilities for the bank if the Promissory Notes being AVALIZED by a bank.

  • Meaning of AVAL is TRUST & ENGAGEMENT, it is a pure trust that the bank provides on the client. However, the banks are not happy to provide AVAL on client’s promissory Notes for the fact that the loan and funding against Promissory Notes does not require any cash back up to be kept by the Avaling bank. As such the good client at a bank deserves to get the loan with the same benefit that we provide to the clients. So the client must get the loan from the bank or from us. The bank must then provide the client with the AVAL.

Advantages Bridge Financing against Corporate Promissory Notes

  • Easy and quick procedures of providing the loan. It takes one day to approve the application submitted by client. At the same time we are always reachable to provide a prompt reply and approval including structure of the complete transaction to the client within few hrs time in writing.
  • Almost zero cost at the end of the term subject that the client will utilize the loan into pure trade of commodities and products which shall be carried out of a minimum 6 Turnover per year.
  • Still the loan can be used for those projects which need time to build up. However any project that requires time to build up, still will not require the full amount of money to be paid overnight. Accordingly the client must have a financial management to enable trading facilities to back up the loan and to run the building up of the project on a Parallel line.
  • The biggest advantage of our bridge financing / loan against Promissory Note is the structure of profit generating method and utilizing those profit to ADD-UP strategy. The profit which will be generated shall be invested with an immediate effect to the trading facilities to enable of generating more profit using the Loan which is considered as a Working Capital (WC) and the profit being generated too as an ADD-UP TO WC.
  • Further the blessing and joy of our loan is that, the WC in hand will remain in hand for the full period of the lone time. It is the other way around from the banking and typical banking loans. In the typical banking loans, the borrower will have to lodge of minimum 150% collateral to get the loan. We do not have that nor we require that, and the interest is a flat interest rate for the period of loan and on top of that all, the installment which the client have to pay on a monthly basis, the installment means, part of the WC and the interest. So by 4 month time, 35% plus the interest will be out of the client’s hand and here is what will happen (BRAKE DOWN) as such the client cannot even complete any trade turnover nor pay the installment. In addition the bank will not give the client cash to purchase the product on a cash basis which is the most competitive offers can be made if the buyer is paying part payment in advance or fully payment at delivery time. A lot of clients requires cash back up to carry out competitive trade.
  • Part of the advantage of our loan facilities is that we help the client to structure a financial management with their own bank and/or provide them a banking facilities that can grant them a marginal basis facilities which will require part of the loan that we provide to the client to be deposited at those banks and a Letter of Credit Facilities will be provided to the client on a marginal basis. Such facilities will allow the leverage up of the WC of 200% to 400% of the face value of the loan amount.

Specific Terms and Conditions on Promissory Notes with Bank's AVAL:

Our simple procedures for providing loans and bridge financing against Promissory Notes with a bank AVAL are the following:

We provide the sample of an informational swift required to be issued by the Avaling bank to our bank.
  • The client shall takes all the above mentioned drafts / samples to the bank Avaling bank and negotiate the terms  and conditions with the bank. And provide us with a Project Executive Summary only.
  • An authentication will be carried out between of our bank and the Avaling bank and upon the completion of the authentication, the loan amount will be released to the client’s designated bank account within maximum 5 working days.
  • Upon acceptance of the Avaling bank to get engaged with the client and us, we sign the Loan Agreement and           within 5 working days the client will issue the Promissory Notes and the client's bank will add the AVAL and provide us with the swift required and deliver the Original of the Promissory Notes to our bank.
  • The client provide us with an application on a form of KYC-A. We evaluate and carry the due diligence on the              provided information to us by the client and we reply within 1 working day.
  • Upon completion of the due diligence and acceptance, we provide a Loan Agreement draft which will be                      structured based on each client’s requirements and depends on the nature of the transaction.
  • We provide the sample of the Promissory Notes that the client shall issue to us.

Promissory Notes without bank’s AVAL and based on An Insurance Guarantee:

Many traders and business owners have no bank(s) supporting them on obtaining the required credit lines, loans and credit facilities due to non-availability of the collateral required by the bank to back up the loans required. However, it is an obvious matter that any business shall have insurance. So the insurance is a big and major part with the business.

Accordingly, we have invented the following for a better and easy model to obtain the loan for us based on a Promissory Note to be issued by the client without Bank’s Aval.  

The simple procedures for the transaction are the following:

  • The client submit the KYC-B, form to us.
  • After completion of the due diligence, we will provide the client with the Loan Agreement draft.
  • We will provide a draft of the Insurance Guarantee required. Our requirement is a minimum (A) rated insurance company and in the event the insurance company is not an (A) rated, then the insurance company shall arrange a Reinsurance cover by the underwriters which is called (Cut Through Clause).  
  • We will provide a draft of Insurance Company’s letter of acceptance which is required to be issued by the insurance company to the client and based on the copy of the letter of acceptance issued by the insurance company, we shall promptly act towards opining of the loan file and provide the approval.  
  • The client takes all doc to their insurance company and negotiate the complete deal and present the Project Executive Summary to the insurance company and copy to us.
  • Upon acceptance of the insurance company to issue the Insurance Guarantee to our favour then we will sign all the doc.
  • The client issues the Promissory Notes and submit to the insurance company.
  • The insurance company will issue the insurance guarantee required and send us a copy and the original of the Insurance Guarantee and the original of the Promissory Notes will be deposited at the bank of the Insurance Company.
  • The insurance company will issue the invoice for the premium and our bank will contact the insurance company directly and pay the invoice which will be payment against delivery of the Insurance Guarantee and the Original of the Promissory Notes. The Bank of the Insurance Company is not responsible for the deal. This part of delivery via the Insurance Company’s bank is to pass the compliance that the Insurance Guarantee is issued and signed by the authorized signatory of the Insurance Company at the bank account of the Insurance Company 
  • The premium will be paid by our bank and deducted from the Loan amount and the balance loan amount will be released to the client within maximum 5 working days