Are there any banks in the United States that offer “order packing loans” for trade financing?
Question by gbear62936: Are there any banks in the United States that offer “order packing loans” for trade financing?
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Tags: Banks, order packing loans, trade financing, United States
Generally, reputable FDIC-insured commercial banks do not offer purchase order financing. It is considered a fairly risky form of lending not suitable for a stable bank, because it tends to be “financing of last resort” used by small businesses with inadequate capital and cash flow that are not eligible for other forms of credit.
You will find this kind of lending offered by commercial finance companies, the same kind that offer receivables factoring and a variety of asset-based financing vehicles. Ask around in your community to find a reputable commercial loan broker to help you locate a lender suitable to your circumstances. Be very careful in this market. There is very little regulation and government oversight in this market to protect small business owners, so some business finance companies are more ethical/reputable than others. You will find the terms and pricing to be pretty onerous, i.e., high interest rates, steep penalties for default, draconian collateralization… but the bottom line is that few borrowers in this market are in a position to negotiate loan terms, and the loan products in this market reflect that.