Most global food exporters rely on pre- and post-shipment financing for their operations. Government and local bank support is crucial for a country’s export strength, but these resources may not always cover the entire market efficiently. In such cases, private financing systems become essential, as they offer flexibility and a less bureaucratic approach, making them a preferred choice for on-demand financing solutions.
Trade Finance Solutions (TFS) is an important player in Turkey’s growing export market. Starting operations in the UK in 2008 financing pulp and paper transactions, later, in 2012, they stepped into the international food and drinks market arena. Focusing on countries where financial services are weak, TFS works intensively with Turkey, Romania, Egypt, and, due to the financial crises experienced in recent years, Greece and Argentina. The company, which has recently added clients operating in Turkey, points out that the export potential of the country is immense if the right support is provided. “TFS wishes to be part of the Turkish success story” states Dr. A. Toso, Managing Director of TFS “Our clients are outstanding operators; every time I visit them, I leave with the knowledge that Turkey will become fundamental to the world’s economy. Or perhaps it already is!”
How does the TFS flexible financing system work?
When an exporter makes a sale with payments of 60- or 90-day terms, TFS pays at least 80 percent of the amount in cash on the same day the goods are ready for shipment. The remaining part of the payment is made with 60 or 90-day sales terms. The Invoice value is guaranteed by credit insurance, hence TFS removes the risk of non-payment.
Although the TFS service offers benefits like factoring, there are key differences. The most important difference is that it works with no long-term contacts and with minimum bureaucracy. Stating that it can disburse cash to clients within 24 hours from a credit limit being requested and a shipment prepared, TFS seems to be using the speed of execution to its advantage.
TFS does not require exclusivity clauses, and unlike banks, TFS can support an exporter selectively on one customer at a time. TFS is very attentive to the transparency of their fees and ensures that clients make informed decisions. TFS does not charge interest, so it is Shari’a compliant.
Exporters need to buy raw materials and often pay cash on delivery. TFS also finances purchases of raw materials, by paying suppliers promptly and extending payments up to 90 days to its clients in Turkey.