This overview is a guide to the Banking & Finance content within the Types of trade and commodity finance transactions subtopic, with links to the appropriate materials.
The term 'trade finance' (or ‘trade and commodity finance’) is used to cover a number of different forms of financing and methods of payment, from secured syndicated financings to letters of credit. Broadly speaking, trade finance is used by buyers and sellers of goods internationally to provide credit support for the different stages of the sourcing, production and sale of commodities.
The term ‘trade finance’ encompasses structured and unstructured transactions.
Unstructured trade finance is typically a way of financing trade (usually to assist with a borrower’s capital management), but without a secured loan facility. See Practice Note: Introductory guide to unstructured trade finance.
Unstructured trade finance takes the form of certain financial undertakings and instruments. These include:
bills of exchange—see Practice Note: Bills of exchange—structure and parties
promissory notes—see Practice Note: Promissory notes—structure and parties
commercial letters of credit—see Practice Note:
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