Trade Finance Services-
International Trade Finance
MG Capital Group works directly with the premier provider of financial instruments in trade transactions. We provide facilities like Documentary Letter of Credit (LC), Standby Letter of Credit (SBLC), Bank Guarantees (BG), and other Pre-Advice Messages. Our expertise to understand your complex trade transactions ensures that you get the optimal solution for your business requirement – be it for import, export, or local projects. We serve clients worldwide. Our clients are usually trading companies and importers who want to take charge of their liquidity and avoid the bureaucratic process and documentation that traditional providers have.
We assist in
Our services are tailor-fit to each client’s requirement. The management’s extensive years of experience in the industry as a trade solution provider coupled with a strong network of alliance banks and financial institutions will make your global deals happen in no time.
We aim to provide our client what they need to push their transactions with competitive charges, and most important of all, without long process. This approach has made us one of the most reliable and trusted names among providers of trade finance services.
Finance your Trade via Documentary Letter of Credit
A documentary letter of credit is a guarantee that provides assurance to the beneficiary that he will get the payment which has been mentioned in the documentary letter of credit. There is a condition that the compliant presentation should be under the documentary letter of credit. This documentary letter of credit is commonly used for international transactions where both the buyer and the supplier have a new relationship and operate from different countries.
A documentary letter of credit is a really crucial financial instrument for meeting the short-term needs. It enables the recipients for obtaining the important credit for financing the project. The recipients hope of getting sufficient return for settling the due amount in the provided time frame.
The documentary letter of credit showcases the documents and information that are needed by the beneficiary on presentation which includes the expiry information like date and time of the letter. The compliant presentation is a kind of guarantee given to the beneficiary by the documentary letter of credit for in order to get paid. The only criterion is that the delivery conditions should be met.
It is the responsibility of the bank that writes the letter of credit on the applicant’s behalf to ensure that the terms and conditions which are required for documentation purposes under the credit are met duly before any amount is paid to the supplier. Documentary letter of credits come under the governance of the International Chamber of Commerce (ICC) rules. These rules for the letter of credit are known as Uniform Customs and practice for documentary Credit (UCP). The current version which is in effect is the UCP600 from July 1st, 2007. The concerned parties to a documentary letter of credit are the issuing bank and the beneficiary.
In these cases the credit worthiness of the issuer stands in place of the credit worthiness of the buyer – giving the supplier greater comfort that he will be paid.
Finance your trade via Stand by Letter of Credit
- A direct-pay standby
- A performance standby
- A bid-bond or tender-bond standby
- An advance-payment standby
- A financial standby
- A counter standby
- A commercial standby
- An insurance standby
Finance your trade with a Bank Guarantee
Following are the different bank guarantee types that are available:
A Bank Guarantee is a versatile tool which can function as a number of instruments: a bid bond, a performance bond, and advanced payment guarantee, a warranty bond, a letter of indemnity, a payment guarantee, a rental guarantee, or a confirmed payment order.
- A BID BOND is usually issued for bidders on construction or similar tender based projects. A bid bond is a debt secured by a bidder. In effect, it serves to secure the bidder’s investment in the project and to discourage bidding by less serious players. A bank guarantee could be presented as a partial alternative to the financial capital typically required by a project owner.
- A PERFORMANCE BOND, or CONTRACT BOND is utilized in the real estate industry to make sure a contractor completes a designated project. A performance bond is issued by a bank, insurance company or a financial institution in favour of a beneficiary by order of an applicant, against the applicant’s failure to meet its obligations as per an underlying contract. A performance bond often covers 100% of the contract value and can replace a bid bond when the applicant has been awarded a contract. If effect, applicants use performance bonds to comfort suppliers who are concerned with the prospect that the applicant might become insolvent or otherwise unable to fulfil his contractual obligations. In case of insolvency of the applicant, the beneficiary receives compensation that should ease financial stresses or other damages caused by the contractor.
- An ADVANCE PAYMENT GUARANTEE, or ADVANCED PAYMENT BOND is an agreement where an issuer undertakes responsibility to return an advanced payment to the buyer, should the seller fail to meet his obligations.
- A WARRANTY BOND is a contract between a project/property owner, a contractor, and a surety company. The bond promises that any defects found in the original project will be repaired during the warranty period. Frequently used in the housing and construction sector, a warranty bond guarantees an investor that a contractor will resolve all covenants that relate to materials used and work done before the warranty on the materials expires.
- A LETTER OF INDEMNITY is an instrument guaranteeing contractual provisions will be met; otherwise financial reparations will be made. A letter of indemnity is often utilized to request replacements for lost shares from a company’s treasury.
- A PAYMENT GUARANTEE provides the supplier with financial security in case the applicant fails to pay for goods or services supplied. Payment guarantees mitigate credit or country risk when the supplier ships the goods on an open account basis, which is to say, before receiving payment. Payment guarantees are typically issued to cover debts in cases of non-payment arising under a transaction or over a period of time. The instrument’s wording is based on the terms outlined in the original debt agreement between the applicant and the beneficiary. The applicant will make a repayment based on these terms. Sometimes a payment guarantee can be backed with collateral, such as property or asset that is pre-approved by the lender.
- RENTAL GUARANTEES promise payment to a landlord in case a tenant defaults financially. Since the risk of a tenant defaulting can be extremely harmful to a property owner, rental guarantees are extremely valuable tools which give security to industrial and commercial landlords.
- A CONFIRMED PAYMENT ORDER is an irrevocable obligation to pay. In most cases, the confirmed payment order is conditional on successful completion of a project.
There are certain terms and conditions that the guarantee by the bank is subject to. This stipulates that it is mandatory for the ban to pay the beneficiary the fixed amount promised on the behalf of the client once the conditions are satisfied.
Andorson
Proof of Funds, RWA messages, Bank Confirmation Letter (BCL)
Factoring
- Certificate of Incorporation
- Memorandum /Articles of Association & Board Resolution to verify who is the signing authority and can borrow on behalf of the company.
- Latest Extract
- Copies of Passports for all directors and shareholders
- Address confirmation for all shareholders/directors
- Address confirmation for Company (Utility or Lease Agreement)
- TAX Certificate
- Passport size photos for the signatories
- Company Profile
- Audited Financials for 2 years
- Latest Credit Report of Company and Signatories
- Buyers list (template provided)
- Last Six / Twelve months company bank statements
- Proforma Invoice/agreement
MG Capital Funding VS Alternative Funding Sources
MG Capital Group Inc. work with trade finance and merchant banking professionals with extensive backgrounds from major financial institutions, as well as professionals from manufacturing and trading. Together we bring our combined expertise to address the funding needs of our clients, while simultaneously aiding their clients’ efficiency and profitability in their respective industries.
The limitation of Alternative funding sources
Why MG Capital funding ?
- Finances 100% of the costs providing unlimited growth opportunities
- Finances based on merit of transactions irrespective of borrower’s balance sheet / equity
- Provides transactional venture capital without borrower incurring any loss of equity
- An independent financing source empowering borrowers to negotiate better terms with suppliers
- Finances full cycle from purchase of goods to receivable financing
- More flexible than other financing options
- Experienced in all aspects of trade finance
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