Express Trade Capital completed a $9.7 million standby letter of credit (SBLC) facility. The facility fueled a commodity trader’s purchase of petroleum from a Canadian supplier. The facility was executed early in the first quarter of 2021 and covers ongoing shipments over a 12-month period.
While the client has been in the business since 2010, it is was its first transaction with the new supplier. Due to lack of history between the parties, the supplier requested financial backing for the whole transaction. The client was over a barrel and petrified. With negotiations running out of gas and the transaction unraveling, Express slid in to grease the tires and get this oil deal flowing again.
The SBLC facility refined the client’s overall position in the transaction by allowing it to forego pre-shipment cash deposits, which lowered the supply chain risk and increased cashflow. The client was pumped to get their deal back on the road and looks forward to extracting more lucrative petrol deals in the future.
