Trade Finance – Netherlands

2021 Guide | Trade Finance Global

Trade Finance - Netherlands

Welcome to the Netherlands Trade Finance and International Trade hub. Find out how our Netherlands-based team can help you access trade finance to increase your imports and exports, or find the latest research, information and insights on trade finance here.

What is trade finance?

Trade Finance is the financing of goods or services in a trade or transaction, from a supplier through to the end buyer. It accounts for 3% of global trade, worth some $3tn annually. ‘Trade Finance’ is an umbrella term, which includes a variety of financial instruments that can be used by an importer or exporter.

These include:

  • Purchase Order Finance
  • Stock Finance
  • Structured Commodity Finance
  • Invoice Finance (Discounting & Factoring)
  • Supply Chain Finance
  • Letters of Credit (LCs) and;
  • Bonds & Guarantees

The terms Import Finance and Export Finance are used interchangeably with Trade Finance.

In order to address some of the common issues and misunderstandings around Trade Finance, we have put together this short guide.

How can trade finance benefit my Netherlands based business?

Trade finance facilitates the growth of a business by securing funds required to purchase goods and stock. Managing cash and working capital is critical to the success of any business. Trade finance is a tool which is used to unlock capital from a company’s existing stock or receivables or add further finance facilities based on a company’s trade cycles.

Why does this help? A trade finance facility may allow you to offer more competitive terms to both suppliers and customers, by reducing payment gaps in your trade cycle. It is beneficial for supply chain relationships and growth.

Other benefits of trade finance

  • Short to medium-term working capital, using the underlying products or services being imported/exported as security/collateral. It increases the revenue potential of a company, and earlier payments may allow for higher margins.
  • Trade finance allows companies to request higher volumes of stock or place larger orders with suppliers, leading to economies of scale and bulk discounts. 
  • Trade finance can also help strengthen the relationship between buyers and sellers, increasing profit margins. It allows a company to be more competitive.
  • Managing the supply chain is critical for any business. Trade and supply chain finance helps ease out cash constraints or liquidity gaps – for suppliers, customers, third parties, employees or providers. Earlier payments also mitigate risk for suppliers.

It is important to note that trade finance focuses more on the trade than the underlying borrower, i.e. it is not balance sheet led. Therefore, small businesses with weaker balance sheets can use trade finance to trade significantly larger volumes of goods or services and work with stronger end customers.

Due to the embedded risk mitigants that surround trade finance lending and instruments, it leads to the potential of a diversity of supplier base for trading companies. A more diverse supplier network increases competition and efficiency in markets and supply chains.

Companies can also mitigate business risks by using appropriate trade finance structures. Late payments from debtors, bad debts, excess stock and demanding creditors can have detrimental effects on a business. External financing or revolving credit facilities can ease this pressure by effectively financing trade flows.

 

Get started – talk to our Netherlands team



If you have a trade finance enquiry, please use the contact form below.

 

Finance Queries:

nl.team@tradefinanceglobal.com

trade.team@tradefinanceglobal.com

Partnership Queries:

introducers@tradefinanceglobal.com

Find out more about partnering with us here.

 

Want to learn more about Trade Finance?

Look no further. We’ve put together our feature Netherlands trade finance insights, research and articles, and you can catch the latest thought leadership from the TFG, listen to podcasts and digest the latest in international trade in the region right here.

From the Editor – Trade Finance Insights

UK food exports to be boosted by new mentor scheme Department for International Trade (DIT) launches new mentorship programme to help UK farmers and food producers boost their exports.
Goodbye ITPP 2020 and hello ITPP 2021 ITPP 2021 is launching later this month. The ITPP is the only opportunity for the future leaders of trade finance to assert themselves and develop professional skills, understanding and reputation.
TXF: The good, bad, and the ugly – commodity trade finance in a post-COVID world In a panel moderated by Christine McWilliams at TXF’s Global Commodity Finance Virtual 2021, which TFG partnered with, this impact was discussed at great depth, looking at how to navigate commodity trade finance in a post-COVID world.
Report: Brexit could cost UK exporters £25bn as full Covid recovery pushed back to 2023 The UK’s exporters could face a Brexit bill worth as much as £25bn in lost revenues in 2021, according to a new report by Euler Hermes.
The application of blockchain in trade finance: opportunities and challenges The present article discusses the potential benefits of using blockchain technology for trade finance activities and highlights significant challenges facing the blockchain’s adoption
euf x fci EUF and FCI held their first online EU Factoring Summit EUF plays an important role for our industry today more than ever and confirming FCI’s support regarding the lobbying of the new definition of default with the EBA.
FCI insights Podcast: FCI – Views from the Board, Factoring and Receivables TFG’s Deepesh Patel caught up with FCI’s Chairman, Mr. Patrick de Villepin, and FCI Vice Chairman, Mrs. Daniela Bonzanini, on the critical role of Receivables finance industry in the recovery of global trade growth during this challenging period.
Alfa-Bank and NLMK launch Foreign Trade Finance Pilot Transaction with Commerzbank and Vesuvius GmbH via Marco Polo Alfa-Bank and Novolipetsk Steel Company (NLMK), in cooperation with Commerzbank, Germany, and Vesuvius GmbH, Germany, have launched a pilot project of cross-border payments via the Marco Polo international trade finance network. For Marco Polo, it is the first Russian-German import-export operations financing project.

Videos – Trade Finance

Trade Finance – Frequently Asked Questions

What types of Trade & Receivables Finance does TFG offer?

TFG assists companies to access trade and receivables finance through our relationships with 270+ banks, funds and alternative finance houses.

We assist specialist companies to scale their trade volumes, by matching them with appropriate financing structures – based on geographies, products, sector and trade cycles. Contact us to find out more.

Trade Finance & Stock Finance

  • Trade Finance (Purchase Order Finance)
  • Stock Finance
  • Pre Export Finance
  • Import & Export Finance
  • Structured Commodity Finance
  • Letters of Credit
  • Bonds & Guarantees

Receivables Finance & Invoice Finance

  • Receivables Purchase
  • Invoice Finance
  • Discounting
  • Factoring
  • Supply Chain Finance

Specialist Trade & Receivables Finance

  • Borrowing Base Facilities
  • Back-To-Back LC Lines
  • Long Dated Receivables – Media, Sport
  • Revolving Credit Facilities (RCF)
What is the process for applying for trade finance?

1. Application

The initial ‘credit’ application drives the process when applying for credit.

Lenders will often ask for information on current assets or collateral that the business owns, including debt and overdrafts, assets that the company or directors own (property, equipment, invoices).

2. Evaluating the Application

The evaluation process will normally involve some kind of credit scoring process, taking into account any vulnerabilities such as the market the business is entering, probability of default and even the integrity and quality of management.

3. Negotiation

Eligible SMEs applying for trade finance can negotiate terms with lenders. An SME’s aim with a lender is to secure finance on the most favourable terms and price. Some of the terms that can be negotiated can include fees and fixed charges, as well as interest rates.

4. The Approval Process and Documentation of a Loan

Typically, the account officer who initially deals with the applicant and collects all of the documentation will do an initial credit and risk analysis. This then goes to a specific committee or the next level of credit authority for approval. If the loan is agreed (on a preliminary basis) it goes to the legal team to ensure that collateral can be secured/ protected and to mitigate any risks in the case of default.

Read our full ‘trade finance application process’ here.

Strategic Partners:

Get in touch with our Netherlands trade team

Speak to our trade finance team

Quick Links

Latest Netherlands feature from Trade Finance Talks – Trade in Continental Europe

Download our free trade finance guide



Latest Netherlands Trade News

21Apr

FCI reports 6.6% drop in global factoring statistics in 2020

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The first estimates for the factoring industry worldwide in 2020 have been announced today by the FCI’s Peter Mulroy. Factoring… Read More →

12Jan

Report: Brexit could cost UK exporters £25bn as full Covid recovery pushed back to 2023

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The UK’s exporters could face a Brexit bill worth as much as £25bn in lost revenues in 2021, according to… Read More →

17Nov

The application of blockchain in trade finance: opportunities and challenges

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The present article discusses the potential benefits of using blockchain technology for trade finance activities and highlights significant challenges facing… Read More →

06Nov

EUF and FCI held their first online EU Factoring Summit

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EUF plays an important role for our industry today more than ever and confirming FCI’s support regarding the lobbying of… Read More →

02Nov

Who’s Who? 7 initiatives in shipping, freight and supply chain using DLT & blockchain

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Freight forwarding, shipping and logistics are undergoing a digital makeover. Connecting the dots, enabling traceability and increasing transparency between parties… Read More →

15Oct

Podcast: FCI – Views from the Board, Factoring and Receivables

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TFG’s Deepesh Patel caught up with FCI’s Chairman, Mr. Patrick de Villepin, and FCI Vice Chairman, Mrs. Daniela Bonzanini, on… Read More →

25Jun

FCI publishes the 2020 Global Factoring Annual Review

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The FCI Annual Review is a globally recognised publication in the world of Factoring and Receivables Finance. … Read More →

16Jun

Coface Insights: Business insolvencies in Europe – amendments to legal procedures temporarily postpone due dates

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The economic consequences of the COVID-19 pandemic are of an unprecedented scale in Europe. The twin supply-demand shock has resulted… Read More →

27May

Quarter of SME Merchants were Borrowing Funds to Pay Business Costs or Salaries – Even Before Covid-19

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London, 27th May 2020 – Europe-wide research commissioned by innovative financial infrastructure provider Banking Circle has found that nearly two… Read More →

10Mar

NEWS: Global Factoring Industry Grows 5% to €2.9b in 2019, FCI

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The first estimates for the factoring industry worldwide in 2019 have been announced today by the FCI Secretary General at… Read More →

11Oct

Alfa-Bank and NLMK launch Foreign Trade Finance Pilot Transaction with Commerzbank and Vesuvius GmbH via Marco Polo

0 Comments

Alfa-Bank and Novolipetsk Steel Company (NLMK), in cooperation with Commerzbank, Germany, and Vesuvius GmbH, Germany, have launched a pilot project… Read More →

23Sep

SWIFT enables payments to be executed in seconds

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New service links gpi, banks and domestic real-time payments systems·                 Successful trial with Europe’s TIPS SWIFT today announces the launch… Read More →

12Jul

NEWS: Factoring and Commercial Finance continues to be a low loss given default with 7.9% YoY Growth

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The most recent version of the EU Federation (EUF’s) Industry Standard Whitepaper has been recently updated and published with the… Read More →

27May

NEWS: EU Factoring and Commercial Finance grows 7.9% in 2018

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Final analysis of data collated by the EU Federation for the Factoring and Commercial Finance Industry (EUF) shows that in… Read More →

14May

Global Factoring and Receivables Finance Industry increased by 6% in 2018

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In 2018 the world factoring industry volume continued its upward trend with a total reported figure of over 2,767 billion… Read More →

19Jul

The Socioeconomic impacts of Shipping in the Netherlands

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Shipping has been an important activity throughout history, particularly when prosperity depended primarily on international and interregional trade. In fact,… Read More →

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