All About Loan In Singapore
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Trade Facilities That Are Best Used For Wholesale Business

How does third party lenders come up with the Singapore trade finance terms that they offer?

You will never know how because every lender or bank in Singapore will have their own internal policies to evaluate every application for Singapore trade finance services.

The best that you can do is to estimate the trade finance terms that a lender of bank in Singapore may offer you on Letter of Credit (LC), Trust Receipts (TR), Accounts Payable (AP), Accounts Receivable (AR).

To estimate the trade finance terms, you have to calculate and work out your company’s “Net Cashflow Cycle”. The cycle of your cash flow in days can determine the trade finance terms of the trade finance services offered.

1) Inventory Cycle = Inventory / (COGS/365)
2) AP Cycle = AP / (COGS/365)
3) AR Cycle = AR / (Sales/365)

Net Cashflow Cycle = Inventory Cycle + AR Cycle – AP Cycle = No. of Days