August 18, 2023

STANBIC IBTC BANK NIGERIA

TRADE FINANCE

Import Finance

Import Finance is a flexible short term loan that can help your business to manage cash flow from the date a supplier’s invoice becomes payable up to the point of settlement from the ultimate buyer. The two main types of important finance we offer are Letters of credit and Bills for collection.

Benefits

Provides greater flexibility and liquidity by bridging the gap between payment for imported goods and receipt of funds through subsequent sales.
Allows you to make timely payments to your suppliers.
Enhances your business reputation with potential to negotiate more favorable payment terms.
Can be used to extend your credit period beyond the terms given by your supplier under Documentary Credits and Documentary Collections.
Available through local funding (Naira) and offshore funding (foreign currency).
Available for importation of goods.

A Letter of Credit (LC) is sometimes also referred to as a Documentary Credit. A letter of credit is a conditional undertaking given by a bank at your request to another bank in favor of a beneficiary stating that a contract has been established between both parties and payment should only be made upon confirmation that terms and conditions of the Credit has been complied with. There are various types of LCs in international trade. They include Sight LC, Deferred LC, Transferable LC, Revolving LC, Back to Back LC and Red & Green Clause LCs. Generally LCs can either be confirmed or unconfirmed depending on the parties involved.

Benefits

Available to support both import and export transactions.
Most secured mode of payment in international trade.
Available in 13 currencies globally.
Risk of non-payment and non-delivery does not exist as both parties are bound by conditions that must be met for both delivery and payment.
Safest and most secured method of payment compared to other methods of payment.
Provides financing structure for importers and exporters.

A bill for Collection is a method of payment in international trade. It is a trade arrangement whereby the exporter has agreed to sell to the importer upon acceptance of a bill of exchange that stipulates the specified date upon which payment is expected. The bill of exchange is a document that briefly states the underlying sales contract, the amount and the calculated credit days from the bill of lading when importer is expected to make payments to Exporter. Bills for Collection is seen as a credit from the exporter to the importer and such credit offer is usually earned based on the number of years that both parties have been transacting.

Benefits

Bill of Exchange must be accepted before documents are released.
Serves the need of both exporter and importer.
Payment is made at a later date agreed by both parties.
Involves a high level of trust.
It’s cheaper than a Letter of Credit.
Gives the importer access to a flexible cash flow management and liquidity.
Provides enough time for importer to sell the goods and pay back.
Provides growth opportunities for importer’s business.

Invoice Discounting

This type of finance lets your business draw money against its sales invoices before the customer has actually paid. It enables their customers to improve their company’s working capital and cash flow so they can achieve their business goals faster.

Benefits

Generates immediate cash flow for the business, allowing it to maintain and grow an efficient capital structure.
Helps a business to maintain and grow an efficient capital structure.
Provides cash to help in the continued running of the business.
Up to 80% value of the invoice can be discounted.
Domiciliation of proceeds with the bank.
Rates are negotiable
Only invoices from blue chip companies are acceptable.

Requirements

Formal application letter
Board resolution (if a limited liability company)
Duly accepted offer Letter
Duly executed irrevocable domiciliation agreement for the full invoice value of the contract into a collections account
Copy of the supply order/contract document
Copy of confirmed invoice from supplier
Copy of acknowledged delivery receipt & certificate of contract performance
12 months’ bank statements (for new to bank customer)
Duly executed statement of personal guarantee of company owner(s).

Purchase Order Discounting

A number of organizations make use of third parties to provide some of the items required in their businesses and set out specifications of items needed either in a contract agreement document or a Local Purchase Order (LPO). These third parties or “contractors” or “suppliers” often require financial assistance to execute such supply contracts. Examples of Companies that may require LPO/Contract Financing:

Suppliers to oil majors and oil servicing companies
Contractors to reputable manufacturing companies and FMCG companies
Suppliers to construction giants
Contractors to reputable telecoms companies

Benefits

Provides working capital to execute the contract
Timely execution of the contract as a result of the access to funds.
No need to provide tangible collateral
Opportunity to deliver a job if the business is in a tight cash position.
The repayment of the loan is tied to the receipt of the payment for the contract.
Only purchase orders from blue chip companies are acceptable for financing.
Financing of up to 80% of the value of the purchase order.
Domiciliation of proceeds with the bank.

Requirements

Formal application letter
Board resolution (if a limited liability company) approving the request
Duly accepted offer letter
Duly executed irrevocable domiciliation agreement for the full LPO value of the contract into a collections account
Copy of supply order/contract document
Copy of goods/product invoice from supplier
12 months’ bank statement (for new to bank customer)
Satisfactory credit bureau report
Duly executed statement of personal guarantee of company owner(s)
Work order/contract duly verified by the collections monitoring unit (CMU).

Distributor Finance

In its simplest form, their Distributor Finance products enables wholesalers or key distributors of finished goods to access credit to finance e.g. working capital overdrafts to enable them purchase inventory from their principals. This product offers the key distributor and wholesalers a flexible means of payment, long and short-term that helps both the principal and key distributor improve their cash flow. These facilities can also be disbursed as a payment guarantee wherein the Stanbic IBTC Bank undertakes to repay the principal based on a spontaneous financing to be made available to the key distributor. Longer termed facilities are available for expansionary purposes with asset financing options.

Benefits

Improved turnover by providing short-term working capital finance.
Significantly reduced collateral terms and options (cash, legal mortgage etc.).
Interest rates are very competitive and attractive taking into cognizance your gross margins.
They will ensure you’re not over-leveraged by minimizing loan to a manageable ratio of your turnover.
Affordable insurance to go with your finance
Free business monitoring solutions.
Dedicated relationship managers with vast experience.
Referrals businesses

Who is it for?

Fast Moving Consumer Goods (FMCG)
Manufacturing
Oil & Gas
Telecoms and Media
Healthcare

Requirements

Letter of Introduction of the Distributor from the Principal
Statement of account with Principal (past 12months)
Facility letters of existing/previous facilities with other banks
6 -12 months banks statement
Three year Audited financial statements
Distributor’s letter of request
Inventory report and collateral documentation
Company’s profile and incorporation documents

Vehicle Loan

They offer flexible repayment options for businesses looking to buy new or used vehicles and insurance for the loan.

Benefits

You immediately get access to use the vehicle.
Your business will own the vehicle at the end of the agreed period once the last payment has been made.
There are a wide variety of repayment options available to suit your business’ cash flow.
‘They will advise you on how to structure the loan taking into account your business’ cash flow and the amount you have available for deposits.

Requirements

Full names and capacities of those who will sign the finance deal.
CV of each member of the management team.
The reason you need the finance.
Your business’ financial statements, including an income statement, balance sheet and cash flow statements.
Personal statements of assets and liabilities of all the partners, members or directors.
A 12 month cash flow estimate.
The amount of your own contribution and the source of the funds.
If you do not have a business account with Stanbic IBTC Bank you must provide the business’ bank statements for the past six months.

Equipment Loan

Their Equipment Loan provides you with financing options so you can get the assets you need for your business. They offer flexible repayment options and affordable insurance to go with your purchase.

Benefits

Your business will own the equipment at the end of the agreed period once the last payment has been made.
There are a wide variety of repayment options available to suit your business’ cash flow.
They will advise you on how to structure the loan taking into account your business’ cash flow and the amount you have available for deposits.
You immediately get access to use the equipment.

Requirements

Full names and capacities of those who will sign for the financing.
CV of each member of the management team.
The reason you need the finance.
Your business’ financial statements, including an income statement, balance sheet and cash flow statements.
Personal statements of assets and liabilities of all the partners, members or directors.
A 12 month cash flow estimate.
The amount of your own contribution and the source of the funds.
If you do not have a business account with Stanbic IBTC Bank, you must provide the business’ bank statements for the past six months.

Property Finance

Stanbic IBTC Real Estate Finance provides debt financing for construction, renovation and acquisition of properties. These include residential and commercial real estate.

Benefits

Loan amount from NGN 75 million
Equity contribution as low as 20%
Tenor up to 5 years
Moratorium up to 2 years
Financing for:

Residential Real Estate: Small estates, Medium estates and Large estates
Commercial Real Estate: Retail- Shopping Malls, Lock-up shops, Markets, Office- Grade A and Grade B Types, Hotels, Others- Schools, Filling Stations, Warehouses, etc.
They also support construction companies in various ways like providing Payment Guarantee, Performance Bonds, and Bank Guarantees.

Requirements

Project Information
Title documents
Projected cash flow of project
Proof of track record

Agriculture Finance

They offer products such as overdrafts, asset finance, medium-term loans, a revolving credit plan and a production loan.

An overdraft is a great way to help you finance you short-term cash flow and working capital needs. It is linked to your current account and you can use as much as you need up to your agreed limit. As a farmer, you can apply for an overdraft when you require, to help in the running of your farm or to purchase necessary farming equipment.

Benefits

It is quick and easy to arrange.
Cash is available when you need it.
Interest is paid only on the money you use, not on the full amount at which your limit is set.

Asset Finance

To finance your entire farming vehicle and implement needs, they offer a wide range of packages to suit your business’ cash flow and tax requirements. Vehicles and assets we finance include: Tractors, Harvesters, Centre pivots and Solar panels

Medium Term Finance

This loan is directed at commercial farmers with proven financial track records. It can be paid off monthly, bi-monthly, quarterly or installments over two to ten years. You can use this loan to finance purchase of livestock or farm buildings.

Benefits

Flexible repayment plan and easy access to your funds.
No unnecessary troubles about loan repayment

Revolving Credit Plan

A business revolving credit loan is a fixed monthly payment that allows you to borrow up to your original loan amount again, once you have repaid 25% of the loan. It can be paid off over two to five years. Just like the overdraft, you will only pay interest on what you use.

Benefits

Funds can be accessed through your business accounts at any time.
As long as 25% of what you owe has been paid, you do not have to worry about reapplying for a fresh loan.
Effective cash flow planning tailored to suit your financial needs.

Production Loan

An Agricultural Production Loan (APL) is a short-term credit that lets you upgrade and modernize your agricultural machinery and equipment. Loans are granted for between six and twenty-four months with required repayment at the end of the term. It is suitable for grain farmers, individual farmers, groups and legal entities in the agricultural sector.

Input costs that qualify for production credit include: