2. Presented by Stephanie Diakité, CATEK
Oct. 31, 2010 – USAID-SIAO Seminar Series
Ouagadougou, Burkina Faso

3. Pre-export
Daily
Operations
Business
Development

4. SHORTTERM FINANCING
TIEDTO
ORDERS
MIDAND LONGTERM
FINANCING
.
TIEDTO
BUSINESS
STRATEGY

5. BASIC EXPORTTRADE FINANCE PRODUCTS
Letters
and Lines
of credit
Advances
Loans

6. ADVANCE
Example – client
advance to acquire raw
materials for processing
LOAN
Example – commercial
loan to acquire and
install processing
equipment

7. Revocable letter of credit
LC can be revoked by the issuing bank without the agreement of the beneficiary.
Irrevocable letter of credit
Cannot be cancelled or amended without all the parties agreement.
Standby letter of credit
Guarantee of payment. If the beneficiary does not get paid by its customer, it can
then demand payment from the bank by forwarding a copy of the invoice that
was not paid and supporting documentation.
Revolving letter of credit
It is established when there are regular shipments of the same commodity between
supplier and customer. Eliminates the need to issue an LC for each individual
transaction.

8. 

• Lump sum of money
• Repayment by installments over a
defined period of time (capital +
interest)Loan
• Maximum amount of money available
• Can be used as needed
• Repayment is flexible (capital + interest)
• Capital reimbursed becomes available
for use
Line of
credit
LOANS AND
LINESOF
CREDITARE
DIFFERENT!

9.  Traditional Channels
 Customers
 Commercial banks
 Developmentbanks
 Specialized public
services
 Equity partners
 Other Channels
 Savings and loan
cooperatives and
associations
 Microcredit organizations
transitioning to savings and
loan organizations
 Personal and/or
professional contacts and
acquaintances

10. Buyers and pre-export suppliers
needs assurances before they
will advance funds on
purchasing or supply
Banks and other financial
institutions require hard and soft
guarantees of recovery

11. TRUST
TRACK
RECORD
CAPACITY
HARDAND SOFT
GUARANTEES

12. Work with and through
recognized industry
channels
Work with financial
institutions that know
your industry
Get in the financial
services loop
Use financial
instituitons that have
guarantee and/or
special lending
programs

13. Transparency and good
governance are key
Reinvesting in your business
will enable you to grow
Opening your capital to
partners with capacity you
have not yet build is a
financing option
Submit clear, credible
applications for financing

14. Start ups need not apply is very
prevalent.
Until you have a track record, you may
have to depend on advances and
informal lending channels.
Document your successes!
Build a financial services history
BuildingTrack Record

15. Prevailing regulations
require hard guarantees up
to and often exceeding
100%
Negotiate contract security
with your purchasers
Tap into development
guarantees
Domicile receivables

16. Application
letter (or
form)
Synopsis
of the
business
plan
DocumentationBusiness
Plan
PROMISING
FINANCING
APPLICATION

17. Background,experience and market
Projected sales for the fianancing period
Conditionsof sale
Financingneeds for the period
Projected financial results
Practicalmeasures for re-payement of the financing
Annexes – Sales contracts and letters of intent,Guarantees

18. Presentation of the
Business
Products and Services
Existing Resources
Short, mid and long
term projects
Expected results

19. Learn more about the USAID West AfricaTrade Hub project at
www.watradehub.com
Stay in touch with all of our activities and results: Subscribe to the USAID
Trade Hub project newsletter, Tradewinds. Send an email to
info@watradehub.com or simply enter your email address on the
website!