Advisory Investment Management

Our boutique trade finance offering supports
African trade by providing flexible, secured,
pre and post-shipment trade finance solutions.

The Business and Funding Model

AMCTF provides flexible, secured trade finance solutions whilst using a DLC as the underlying collateral instrument.

Our model is transaction, rather than balance sheet driven, and our aim is to dramatically increase the availability of trade finance to inward trade to selected African countries, with a particular focus on Sub-Saharan African countries.

The capital adequacy requirements of Basel III is making it increasingly difficult for banks to serve the multi-billion dollar African trade finance market.  AMCTF’s bank-friendly trade finance solution empowers the banks to serve their customers to the required levels.

Our methodology requires no changes to standard trade finance bank processes and procedures. We take great care of applying International Chamber of Commerce (ICC) best practice tools and techniques to the benefit of both buyers and sellers when structuring our trade finance solution.

Our major value-add is to enhance the DLC, thus perfecting our security under UCP 600 guidelines.

Team

The Trade Finance Model

AMCTF provides flexible transactional trade finance for sellers or buyers with a DLC, thereby recognising the DLC as a quality collateral instrument for providing pre-shipment finance.

Our major value-add is to enhance the DLC, thus perfecting our security under UCP 600 guidelines.

The Basic Criteria

  1. The exporter ships from non-sanctioned countries
  2. The goods are pre-sold
  3. GPM of the goods exceeds 20%
  4. Goods require no more than 30 days to finish and ship
  5. Client can afford the facility fee for the duration of the loan
  6. Client uses the facility to execute the transaction and not for general trading

The Basic Features

  1. The funding facility is transaction focused
  2. A perfected DLC as per UCP 600 guidelines
  3. Maximum advance up to 80% of the value of the DLC
  4. The funding facility is a short term position of 30-120 days
  5. The funding facility position is self-liquidating

Product Offering

  1. Off-balance sheet stand alone transactional facilities
  2. Back-to-back LC facilities
  3. Co-financing LC with other institutions
  4. LC discounting
  5. Supplier cash payments
  6. Documentary Collections

The Trade Finance Credit Policy

Deal Origination

AMCTF’s origination strategy is diverse. Typically deals are originated through introductions/ referrals, self generations and channel partners (including LC prep houses, other alternative lenders and banks). Once a prospective client is identified, the application process starts.

Application & Phase One

This stage broadly covers the initial transaction due diligence required before indicative terms can be issued to on-board the prospective client. This includes: KYC, transaction parameters, counterparty analysis, security analysis, financial analysis. Any application fees due are also collected at this stage.

Structure & Indicative Terms

Working with the Head of Credit, a deal transaction structure is produced and indicative terms are drawn and presented to the prospective client. Key considerations include: Amount, facility type, affordability, security, counterparty risk.

Phase Two DD

Upon acceptance of indicative terms by the prospective client, more detailed in depth analysis is done on the transaction, cross counterparty KYC &  AML checks and physical transaction documents are collected. On-site client inspection is arranged with the Head Of Credit and all information is compiled for the Credit Paper.

Credit Paper

Once all DD is complete, and so long as the Sales Team is of the opinion that the deal is still viable, a Credit Paper is prepared. This is the formal proposal that is submitted to the Credit Committee to assess an opportunity. A Credit Paper will not be accepted if all supporting documentation is not readily available to the Credit Committee.

Credit Committee

This phase involves members of the Credit Committee to meet and deliberate whether or not to support a presented transaction. The Committee not only assesses the credit risk of the transactions, but also decides on the various administration tasks associated with running the facility.

Deal Execution

This phase involves implementation of the Credit Committee’s decision. Loan agreements, registration of security and other legal requirements are finished off in this phase, before the facility is finally signed off by Head of Credit and suppliers are paid.

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Contact Us

Africa Merchant Capital Limited
Linen Hall
162-168 Regent Street
London
W1B 5TB
United Kingdom

amctf@africamerchantcapital.co.uk

+44 (0)2037 457 030