The Basel capital adequacy rules seem to be encouraging the greater use of more capital efficient products, such as trade finance. The provision of overdraft facilities, traditionally the lifeblood of business, has become expensive, compared to trade finance and other products such as invoice finance and leasing for capital equipment.

However some of the terminology used in trade finance can seem confusing to those who do not deal in that area on a regular basis.

We have produced an overview of three alternative forms of credit support available to lenders offering trade or supply chain finance. Whilst written primarily from the lender’s perspective, the briefing may also be informative to companies looking to obtain trade finance who may be asked to grant pledges, letters of hypothecation and/or trust receipts. To register to receive a copy, please click here.