A short-term facility aimed at financing stocks purchased for your business in the ordinary course of trade by advancing a percentage of the value of the goods. The percentage of the landed cost being financed depends on the nature of the stock-in-trade and the relative properties and values. Meanwhile the merchandise being end-financed would be pledged in favour of the Bank and stored (normally) at your premises under certain terms and conditions. One of the conditions will be that the merchandise being bonded would be held in a locked-up section under the dual control of the Bank and yourself. The release of the merchandise takes place when the sale arises and a pre-established rate of sale proceeds is deposited to the Merchandising Account in reduction of outstanding liabilities on the merchandising account.
Trade Bills as Security
A bridging facility could be a suitable option if you would like to draw against bills of exchange drawn on your debtors which have not yet been due for collection. The actual bills of exchange drawn on trade debtors are handed to the Bank as security against which a margin on these bills will be financed and the funds deposited (normally) in a current overdraft account.
The amount borrowed could be repaid when the bills of exchange mature or maintained if the security is replenished by fresh bills of exchange that would leave the earmarked overdraft limit intact.
Special Bank Guarantee
Should you require bid bonds or performance bonds to back the submission of a tender or a successful bid made in the ordinary course of your business or trade, the Bank will issue the required instrument for your account in favour of the beneficiary i.e. the principal. The unconditional and irrevocable guarantees facilities could also be granted under a General Banking Facility that would cover a bundle of financing products that meet various working capital requirements of your business be it an importing and/or exporting commercial entity, a service company or other business concern.
To retrieve merchandise from the Customs Department in anticipation of receipt of the corresponding bill of laden, the Bank would be prepared to consider opening a suitable Guarantee facility for your account in favour of the Shipping Agent to enable the earliest retrieval of your merchandise. This facility could be earmarked under a General Banking Facility or an ad hoc facility depending on the nature of your commercial needs.