• Trade Finance Solutions

  • Manage Risk, Accelerate Cash and Conduct Business Globally

    You are concluding a cross-border sale with an unfamiliar company — How do you ensure that you get paid?

    You are promised payment in 45 days — How do you put that money to work right now?

    An overseas supplier agrees to ship you crucial materials if you meet their terms — How do you provide that assurance?

    Global markets are creating unparalleled business expansion opportunities. But cross-border business can bring together buyers and sellers who do not know each other well, in differing political, commercial and currency exchange environments.

    Silicon Valley Bank’s trade finance solutions are designed to help your company maximize your global opportunities, smoothly and predictably. By providing guarantees that terms of a deal will be met, we help bring parties together. We also provide them the ability to accelerate cash or to extend terms, depending on the business needs in the transaction.

    The Challenge of Open Account and Cash in Advance Payment

    If the seller ships goods to the buyer without guarantee of payment in an open-account transaction, the seller faces cash-flow concerns from shipping in advance of payment and also faces risk of non-payment. If instead the seller requires cash in advance, the cash-flow concerns and risk shift to the buyer. However, sellers who insist on cash in advance may lose out to competitors who offer more attractive options.

    Providing Safety for the Seller and Buyer

    Letters of credit are commitments by a bank and are among the most secure instruments available for a transaction.

      Benefits include:
    • Managing risk to seller of non-payment from the buyer when terms and conditions have been met.
    • Protecting buyer against payment obligation until terms and conditions are met.
    • Covering additional performance guarantees, for example, to free up operating cash by standing in for a security deposit or a warranty.
    • Accelerating cash flow when exporting.
    • Extending payables further and preserving cash when importing.
    • For established relationships, documentary collections can be a simpler alternative.

    Documents controlling the merchandise or payment are forwarded through banking channels, with merchandise or payment released once the documents are exchanged.

    Payment Risk Diagram

    Other Opportunities to Support International Trade

    Financing Exports and Imports

    The Export-Import Bank of the United States’ working capital guarantee program helps U.S. exporters obtain loans to produce goods or services for export to many countries. These loans, made by Silicon Valley Bank as a delegated lender for the Ex-Im Bank and backed by the Ex-Im Bank guarantee, can provide U.S.-based exporters with the liquidity to accept new business, grow international sales and compete more effectively. Other tools enable you to further extend your financing.

    Managing Currency Exchange Risk

    Silicon Valley Bank can help you protect your cross-border payments against the effects of movements in currency exchange rates. Our foreign currency exchange advisors and traders combine expertise and the latest currency hedging tools so that you can transact simply and effectively in virtually all freely traded and non-restricted currencies on the global inter-bank market.