Finance Solutions
OUR TRANSACTIONAL FINANCE SOLUTIONS
At Amadeus Capital, we aim to offer the most professional, effective business solutions to help provide financing for exporters, importers, and for special corporate projects.
In addition to providing medium-term international finance, we can also help with short-term finance for importers. Additionally, where funding is not an issue, but the importer has suppliers in geographical regions where there is any degree of uncertainty, we are able to provide short-term funding.
Many companies worldwide are using our technique to penetrate new markets worldwide. This is not only because of its flexibility and because of speed, but these companies have also come to appreciate other advantages, namely:
- 100% finance can be offered to your buyer and the repayment profile can be tailored to the buyer's specific cash flow needs.
- All this can be achieved at competitive rates.
- The goods can be sourced from a variety of countries unlike the terms offered by official credit agencies.
- 100% finance is available to purchase the goods.
- Total financing costs are known in advance because the interest rate is fixed and a pre-determined repayment schedule can be structured in order that the importer can budget his cash-flow to suit his own individual requirements.
- Credit can be obtained in one or more freely transferable currencies.
- Goods can be financed which come from a variety of sources.
- To assist cash flow a grace period can be built into the repayment structure allowing for no payment of interest or principal for a pre-agreed period following delivery of the goods.
Our aim is to collaborate with local banks across Africa who may be interested in our new structure thereby providing a seamless service that financially benefits all participants in the trade transaction. We are able to offer businesses a 100% financing of bona fide international trade transactions secured against a variety of banking instruments provided by your local banks.
We work in partnership with your bankers to ensure that our financial sources deliver the required funding at rates that are highly competitive internationally and substantially cheaper than your local bank rate. We are that essential ingredient that enables banks to consider customers who are perceptive enough to use our method of international finance whilst maintaining a profitable relationship with their local banks.
The particular Banking Instruments used for each transaction depends on the Financier and the particulars of that transaction. Below are examples of banking instruments that may be potentially use in the providing international finance for transactions.
Examples of Banking Instrument
Letter of Credit
A Letter of Credit (Also referred to as an "L/C” or a "documentary letter of credit") is issued by an importer's bank in favor of the exporter. Once various details and conditions have been complied, the L/C represents an undertaking by the issuing bank to pay the exporter.
The importer's bank writes The Letter of Credit ("opened" or "issued"). The L/C will detail amongst other things the names of the importer (the "applicant") and the exporter (the "beneficiary"), a description of the goods to be shipped, the shipment date, the date upon which payment for the goods will be made and the documents required to be presented by the exporter to prove the shipment has taken place. Once all the terms within the L/C have been complied with (e.g. the correct shipment has been made within the dates stipulated in the L/C) and all the necessary documents have been made available to the opening bank, the L/C becomes an irrevocable undertaking by the opening bank to pay the beneficiary on the date stipulated in the L/C. In effect, the bank is granting its customer (the applicant) a line of credit for the specific import, while at the same time providing the beneficiary with an undertaking to pay the amount due.
Promissory Note
A Promissory Note is a simple debt obligation. The Promissory Note is a physical payment obligation usually payable to the exporter and issued by the importer. The Promissory Note is a negotiable instrument that transferred by means of endorsement.
Two basic forms exist: the International Format that includes standard wording and no conditions; and a Long Format that may have conditions and extra details included in the wording of the Note.
The International Format Promissory Note is the traditional form used in all countries that are party to the 1930 Geneva Convention on Uniform Law on Bills of Exchange, Promissory Notes and Cheques. It will mention the clauses "for value received", "promise to pay", "effective" and "without deduction". Additionally, the date and place of issue and the maturity date will be included. A guaranteeing bank may reserve a section on the Note for the aval (see below). At the bottom of the Note will appear the name and address of the institution, where the Note should be presented for repayment at maturity.
Bill of Exchange
A Bill of Exchange is a standard document as defined by, and subject to the 1882 Bills of Exchange Act under English Law or the 1930 Geneva Convention on Uniform Law on Bills of Exchange, Promissory Notes and Cheques.
A Bill of Exchange is drawn up by the beneficiary (exporter) and accepted by the obligor (importer) who thereby acknowledges the obligation.
Again, the clauses "for value received", "promise to pay", "effective" and "without deduction" will be included as will the name and address of the institution where the Bill should be presented for repayment at maturity.
A Bill of Exchange (or Bill) is a fully negotiable debt instrument. Transfer of rights and benefits from the Bill passes when the Bill is endorsed in favour of a new owner. Usually this endorsement is made "without recourse" to prior holders or the original beneficiary (drawer).
Aval
Originally introduced in the 19th century under the Napoleonic Code, an aval may be written on either a Promissory Note or a Bill of Exchange. Aval (subject to certain technical details) is in effect a guarantee made by the one who avails to make the payment at maturity regardless of whether the entity issuing (or accepting) the Note or Bill is capable of making the repayment. Because the aval is written on the original instrument, the aval is inseparable from the Note or Bill. An individual, a corporate entity or (most commonly) a bank may give the Aval.
Letter of Guarantee
Unlike an aval, a Letter of Guarantee (a Guarantee) is a separate document that will refer to specific details identifying the instrument being guaranteed. There is no standard wording for the text of a Guarantee, although certain clauses are typically included such as "irrevocable", "unconditional" and "freely transferable".
Usually the Guarantee will be valid until a date beyond the maturity of the document being guaranteed. As such, should there be a default under the original instrument; the holder of the debt has enough time to claim on the guarantor.
Why Local Banks will work with us
- We are not in competition with local banks rather we expand the ability of these banks to provide alternative financing. Our funds are paid directly to the local banks and disbursed by them.
- Customers return all payments to the local banks, which will then remit the principal and interest payments back to the originating financiers.
- The sums provided to the local banks are off balance sheet. In essence local banks are providing their customers with funds raised by Amadeus Capital Limited without necessarily exposing their international credits.
- Local banks serve to guarantee businesses that they already know and already support and charge a nominal fee as the custodian of the international facility we provide.
Supporting Businesses
By raising international finance for businesses at rates that are competitive and comparatively beneficial to the customer, we at Amadeus CapitalLimited have a commitment to help businesses in emerging economies grow.
Growth of mid size businesses to international status will ultimately help employment and industry in Africa as a whole. Our commitment is to assist eligible businesses by sourcing and delivering, through intricate partnerships, a solution that meets the business’ requirements, increases profit and expands horizon.
We are encouraged by repeat purchase transactions and actively recommend reliable clients with a track record of delivery, as desirable clienteles to our banks.
Examples of Transactions:
We will consider (and not restricted to) any transaction with an international slant, such as:
- Purchase of Equipments.
- Purchase of Soft Commodities.
- Purchase of Oil related produce.
- Purchase of Machinery.
What is Required?
The key requirement is a banking instrument issued by our customer’s local bank that demonstrates the commitment to repay the facility we provide.
In order for us to consider a request for funding we will initially require:
- A Letter of introduction from the client’s bankers.
- A commitment letter from the client’s bank which expresses their willingness to back the client’s organisation with a bona fide banking instrument.
- A track record of profitable banking relationship with the client’s banks.
- Knowledge of the industry for which the facility is required.
Request a Quote
To help us provide you with a quote, the following information is needed. (Please note that small amounts - especially with longer repayment periods - may be more difficult to quote hence we can only provide quotes for transactions with a minimum value of $5m only) :
- The name and address of the buyer.
- The name and address of the guarantor proposed by the buyer.
- The currency, amount and the period to be financed.
- The type of goods.
- The repayment structure requested.
- The interest rate which the buyer is willing to pay.
- The latest date by which the goods are expected to be delivered.
- The latest date that complete documentation will be available to us to facilitate the discount.
- The form of debt instrument involved: Bill of Exchange, Promissory Note, Deferred Payment due under Irrevocable Letter of Credit.
To request a quote, simply e-mail the information required above.
We are prepared to consider the discount on a "without recourse" basis and/or silent confirmation up to the period shown for bills of exchange, promissory notes, irrevocable letters of credit or receivables, normally guaranteed by a first class bank for up to 3 years.
|
