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The advance financing is guaranteed by the transfer of the two contractual elements of the first transaction to Erste Group: the sales contract between the customer and the manufacturer, as well as contractual agreements and cash flows (which are the source of the repayment of the financing) between you and your buyers. The raw materials subject to PXF transactions are divided into two types. soft and hard raw materials. The term “soft raw materials” generally refers to cultivated raw materials, such as coffee, sugar, rice, nuts, seeds and livestock, while hard raw materials are extracted, such as gold, copper and oil. Pre-Export Finance (PXF) is a well-established structure used to finance producers of goods and raw materials (see practical note: pre-export financing – structure, parties and risks). It is a kind of commercial financing. Under a traditional PXF facility, funds are distributed by a lender or consortium of lenders to producers to help them meet their working capital needs (e.g. B to cover raw material purchases and processing, storage and transportation costs) or investment needs (e.g. B investments in equipment, machinery and other infrastructure). Each transaction is unique because it is tailored to your needs and the requirements of the jurisdictions involved in the transaction and reflects the results of the extensive diligence we have carried out.

The loan proceeds are used by you for the purchase, storage and processing of raw materials and delivery of the final product. The source of the repayment of the financing would be the proceeds from the sale of the finished product to purchasers under commercial contracts whose terms must be acceptable to the lender. It should also be noted that prior to the launch of the project, the LMA conducted significant market surveys by LMA members who are actively engaged in the PXF financial market. This confirmed that the document was seen as a particular need for greater efficiency through standardization, particularly after the financial crisis that ended the management of legal risks and the concentration on documents developed in close collaboration. As a result, the PXF document was developed and approved by an experienced working group of key players in the bank PXF (including in-house lawyers) and major law firms in the city.

Posted on December 8th, 2020 | filed under Uncategorized |

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