A new working capital solution from Nordea Bank has been developed to help companies to bridge gaps in the trade cycle by extending credit from the production or purchase of goods to the final sale.

The flexible solution can be offered on a standalone basis for an open-account trade or as an extension of a documentary letter of credit (L/C) or documentary collection and claims to offer key benefits, including improved working capital, flexibility and global reach.

Trade term loans

Nordea, which is headquartered in Finland and operates across the Nordic region, is introducing a new working capital financing solution for import and export transactions called trade term loans.

"Trade term loans provide corporate customers with financing for a specific underlying trade of goods or services," according to Pär Ullbro, head of trade solutions at Nordea.

He explains that the option to combine the trade term loan with a documentary credit or collection provides customers with a method of securing payments and mitigating risk associated with international trade.

Trading benefits

The solution aims to give the bank's customers the flexibility to decide which transactions they finance, and how.

Trade term loans aim to provide access to immediate financing, allowing companies to optimise their cashflow and fulfil their trade obligations without waiting for payments from their customers or liquidating other assets.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.