Economic realities in the food industry today include shortages and price hikes. A growing interest in sustainability and other ESG measures is helping offset these challenges, and ensuring crops and farmers alike are protected.
To reduce the impact of supply chain issues, and to support the client in their quest to nurture farming communities, Tradewind Finance provided USD 2.25 million in funding for an agricultural commodities trader based in the Netherlands that exports to Europe and India.
It sources ethically-harvested agricultural products – such as cotton, cocoa, sugar, grains and coffee – from farms and mills around the world, and coordinates their shipment to large corporations.
The company had been experiencing a working capital shortage because of fluctuating commodity prices and the global logistics crisis at the time of the conversation with Tradewind. The company sought to increase sales by choosing collateral-free receivables-based financing. As part of its plans, it would also offer prepayment options to the farming communities it partnered with and would guarantee fair wages to them.
In response, Tradewind stepped in and provided the company with working capital through receivables-based factoring. The program bridged the working capital gap by financing sales with buyers on open account terms of up to 60 days. Tradewind’s German headquarters and local branches in Asia made the lender the most appropriate financial partner, as it was able to provide a cash flow solution for the company’s Dutch invoicing entity, whereas the trader’s decision maker was in Singapore.
René Pastor, Regional CEO of Tradewind Americas, commented on the new financing relationship. “It was a pleasure to work with the very knowledgeable broker on one end of the transaction while on the other was a passionate business owner and industry expert. Our relationship with this client allowed us to gain deep insights into the industry and leverage Tradewind’s ESG division to structure the facility. It was a great instance of great teamwork that led to a great outcome.”
Tradewind evaluated the FCC and GAFTA agreements involved in the dealmaking in tandem with structuring the credit line, enabling smooth communication with the trader’s buyers.
In addition to its headquarters in Germany, Tradewind Finance has offices in Bangladesh, Brazil, Bulgaria, China, Hong Kong SAR, Hungary, Iceland, India, Pakistan, Peru, Turkey, United Arab Emirates, and the United States. By combining financing, credit protection, and collections, Tradewind offers streamlined, flexible, and best-in-class services to exporters and importers around the globe.
