Trade finance signifies financing for trade, and it concerns both domestic and international trade transactions. A trade transaction requires a seller of goods and services as well as a buyer. Various intermediaries such as banks and financial institutions can facilitate these transactions by financing the trade. Trade finance manifests itself in the form of Documentary Letters of Credit (LOC), guarantees, or insurance, and is usually provided by intermediaries (with sight payment, security transaction with deferred payment).

BANK makes use of all its specialist knowledge to offer participations in ECA-covered finance for foreign banks or corporates. Usually, the financing is provided by the contributing bank and BANK in an open syndicate and funded jointly by both participants. Alternatively, the finance solution can be provided on a 100 % basis by BANK, free of any credit risk or funding costs for the contributing bank. A precondition for the grant of buyer credit is the availability of cover by a government export credit agency (ECA). Atradius/Euler Hermes/COFACA are responsible for providing cover for EU exports.
Within the framework of ECA-covered financing, BANK offers various financing options - each tailored to meet the specific requirements:

• Finance under basic agreements
• CIRR loans
• ECA-covered project finance

The basics of ECA-covered finance
The basic requirement for financing is the existence of an export contract, which the exporter signs with the importer and which may include services as well. Furthermore, the importer and exporter agree that part of the contract value is to be financed.
Preferably, the exporter’s bank contacts BANK already during the bidding phase to request an offer for export finance. If the transaction meets all the conditions for ECA-covered finance, BANK will then submit a non-binding indicative offer of finance, thus frequently widening the contributing bank’s scope.

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