Trading Loans for Commodity Traders
Trading loans for commodity traders fund the purchase of a specific cargo and are repaid from the sale proceeds, so each trade carries its own financing instead of drawing on the trader's balance sheet.
Financely structures these facilities as part of its structured trade and commodity finance advisory and places them with banks, trade finance funds and private credit lenders.
How a trading loan works
Select a stage to see what happens.
1. Purchase
The lender funds an agreed share of the cargo value to pay the supplier, against the executed purchase contract.
Where the supplier needs payment before loading, a prepayment structure can sit in front of the trading loan.
2. Control
Security is taken over the goods and documents of title, with the cargo held under the lender's control.
In storage or on difficult routes, an independent collateral manager verifies quantity and quality.
3. Sale
The buyer pays into a collection account controlled by the lender, under an assignment of the sale proceeds.
Buyer credit quality and payment terms drive both the advance rate and the price.
4. Repayment
Proceeds repay the loan first and the margin is released to the trader.
If equity or timing gaps remain, a trade finance bridge loan can cover them.
Repeat flows usually move onto a borrowing base facility that revolves across many trades. For general funding needs, see working capital loans for commodity traders.
What we deliver
Transaction structure
Advance rate, tenor, security and repayment waterfall fitted to the commodity and corridor. See our structured trade solutions for physical traders.
Credit package
Contracts, deal-level cash flow, counterparty KYC and KYCC, and track record, prepared through our trade finance due diligence report service.
Lender placement
Approach to banks and private debt providers for physical traders, term sheet comparison and support to first drawdown.
Who it is for
Physical traders in energy, metals and agricultural commodities with executed purchase and sale contracts, identified counterparties and a margin that covers financing costs. Tickets typically start in the low millions per transaction.
Financing your next cargo?
Share the commodity, contracts, counterparties and amount needed. We will review the trade and set out how lenders are likely to structure it.
Frequently asked questions
What is a trading loan?
A trading loan is short-term, self-liquidating finance for a specific purchase and sale of goods. It funds the cargo and is repaid from the buyer's payment, rather than from the trader's general cash flow.
How is a trading loan different from a working capital loan?
A working capital loan funds the business generally. A trading loan is tied to identified transactions, secured on the goods and proceeds, and sized against the value of each trade.
How much can be financed?
Lenders typically advance a percentage of cargo value, depending on the commodity, counterparties, security and the trader's track record, with the balance funded by the trader.
Is Financely a lender?
No. Financely is an advisor and arranger. Traders close directly with the lender.
This page is for general information only and does not constitute legal, tax or investment advice. Financely is an advisory and arranging firm, not a lender or broker-dealer. Any financing is subject to the lender's underwriting, due diligence, credit approval, documentation and conditions precedent, and no outcome or timeline is guaranteed.