Supply Chain Financing /

Vendor Financing TCI

Key advantages :

  • S&P 'A+' & 'AA' rated Insuring partners

  • Serves as Credit Enhancement Collateral

  • Enhance deal economics & lending spectrum

  • Optimize competitive advantage by holding lending assets on books

        v/s down-selling or BMRP / Syndication

  • Conserve and reduce Risk Weighted Assets (RWA)

  • Enhance lending capabilities by facilitating Counter-party Obligor

       Risk management and relief

  • Expand client borrowing base to include imports/cross-country trade payables under traditional asset-based lending facilities.

  • Qualified Risk Mitigant providing Capital Relief under Basel II / III

Our Value Added Services: 

  • Insurance Policy Framework Structuring

  • Risk Management Guidelines & Best Practices from Insurance perspective

  • Transaction Risk Management Services

  • Client-Onboarding Services

  • Comprehensive Claims Management 

Also termed as ​'Payables Financing' or 'Vendor Financing' or 'Supply Chain Financing' or 'Reverse Factoring', this Trade Credit Insurance Policy is availed by the Bank to insure payment default risk of its Obligor to whom bank proposes to extend trade finance facility to pay Supplier(s) for buying products or services. 

The insurance arrangement is structured in a very bespoke fashion to reflect the specifics of the proposed trade finance facility. Each proposed Vendor / Supplier and product(s) are pre-approved by the Credit Insurer and reflected in the policy contract document. The specifics of the trade transaction, transaction flow, trade documentation, collaterals and financing agreement is all declared by the Bank, perused by the Insurer and incorporated in the policy contract for sake of abundant clarity and precision. 

For Islamic Trade Finance Banks, we also structure Trade Credit Takaful to cater to Commodity Murabaha and Tawarruq (Reverse Murabaha) lending structures in a Sharia compliant fashion. 

Insurance coverage ranges upto maximum 90% but Bank's generally tend to supplement their risk capacity by availing Credit Insurance wrapper with indemnity limits between 50% - 75% treating Credit Insurance more like Risk Participation or quasi-syndication arrangements to sweeten the deal structure. 

Capital Relief​ :

The policy wordings can also be structured and worded in a fashion to provide the Bank with a Capital Relief complying with Basel II and III requirements. 

Let's start a dialogue ! Write to us : TCI@prudence-UK.com ; TCI@prudence-USA.com

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PRUDENCE INSURANCE BROKERS LLC., U.S.A. - Authorized & regulated by California Department of Insurance, U.S.A.