CIT Commercial Services, one of the US' more prominent providers of factoring, accounts receivable management, credit protection, and lending services, has entered into a strategic alliance with TradeCard, the web-based platform that automates trade finance processes.

The alliance provides TradeCard vendors the option to obtain credit protection from CIT, thus according to TradeCard, providing an alternative form of security to bank letters of credit (L/Cs).

Compatible

According to TradeCard, companies that use the their platform can manage credit-protected receivables online whilst using the rest of the company's suite of web-based financial supply chain services.

These include electronic documents, automated workflow and messaging, compliance, settlement and financing.

Factoring

Under the terms of a factoring agreement between CIT and a vendor, vendors may elect, on a transaction-by-transaction basis, to purchase credit protection from CIT.

Payment for the receivable will be made by the buyer, or failing that, CIT, subject to the terms and conditions of the factoring agreement. TradeCard manages this entire process.

Alternative

TradeCard sees its latest alliance as another strengthening of the company's ability to provide a viable alternative to L/Cs.

The company continues to argue that its supply chain platform greatly reduces the risk of human error and eliminates re-keying of numbers and communication by paper which it says are two major causes of financial errors in trade.

News for L/C users

"This alliance is yet another way in which forward-thinking companies can get more value out of their financial supply chain," says TradeCard's CEO, Kurt Cavano.

"By combining the efficiencies and visibility of the TradeCard platform with the financial strength and global reach of CIT, we have made credit-enhanced trade exponentially easier, more efficient and more accurate. We believe this will be welcome news for the many thousands of suppliers who rely on L/Cs today," he adds.

The views in this article are those of the author and not necessarily those of ICC or the other partners in DC-PRO.