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When it comes to financing a transaction, there are a variety of financial instruments available in the market including mortgages or overdrafts which consider the creditworthiness of the borrower. 

However, there are borrowers in the market with unique financing requirements, demanding financing instruments accordingly. In this blog, we will discuss what structured trade finance is and how it benefits borrowers. Keep reading:

What is Structured Trade finance?

1. Structured trade finance is a type of finance specifically designed to meet the unique or complicated financial needs of large corporations that are unsatisfied with traditional/conventional financial products. 
2. This type of trade finance is generally utilized in relation to high-valued cross-border trade transactions and covers a wide range of financial products & services to match the complex finance requirements of large organizations. 
3. Structured trade finance is typically designed for large-scale corporations that have highly specified financing requirements that the existing financial instruments are unable to meet. 
4. It is the most suitable option when the standard loans cannot cover the funding needs of an organization.

Significance and Benefits of Structured Finance

As mentioned above, structured finance is a type of finance designed to cater to the financial needs of large corporations. 

1. Due to the substantial finance needs of corporations, structured finance products aren't offered by traditional lenders while borrowers with less financing requirements often access other financial instruments such as Letters of Credit, other Lending solutions, etc.  

2. Since structured finance requires a major capital injection into an organization, these products are always non-transferable, ie. one cannot exchange them between various types of debts in the same way as a standard loan. 
3. Various corporations, governments, and financial intermediaries are popularly using Structured trade finance to manage risks, expand business reach, and develop financial markets. 

Examples of Structured Finance Products

When a conventional or standard loan is not enough to cover the complex funding requirements of a corporation, a number of structured finance products are offered.

Read more: https://www.emeriobanque.com/blogs/structured-trade-finance-what-does-it-mean