Nordea Launches New Working Capital Solution for International Trade

Nordea Bank Abp has launched a new financing solution, 'trade term loans,' designed to support companies in international trade and enhance their working capital capabilities. The new offering helps businesses bridge financing gaps between the production or purchase of goods and their final sale.

The key benefits of this financial instrument include improved working capital, flexibility, and global reach. 'Trade term loans' provide corporate customers with financing for a specific underlying trade of goods or services. The solution can function independently for open account trade financing or complement a documentary credit or documentary collection. This offers customers the flexibility to decide which transactions they finance and how.

This financing solution enables immediate access to funds, assisting companies in optimizing their cash flow and meeting their commercial obligations without waiting for customer payments or liquidating other assets. It can help companies offer extended payment terms to buyers and improve cash flow for suppliers, potentially leading to enhanced negotiating power and competitive advantages.

Nordea highlights that 'trade term loans' differ from other supply chain financing programs due to its flexibility, as it can be utilized for single transactions or, when needed, for a revolving credit facility. This makes it a suitable option, particularly for companies seeking expansion or those dependent on seasonal purchases or sales. The solution aids businesses in freeing up capital for strategic investments rather than tying it up in trade transactions.

The Norwegian company Eurobus Nordic, which imports electric buses from China to the Nordics, has already utilized the 'trade term loans' solution. For large procurements, such as orders of over 50 buses, the cost of a single transaction can be substantial. Nordea's working capital financing solution helps the company effectively manage these significant funding needs.