Refinancing of export or refinancing of projects in the Slovak Republic

This is pre-delivery financing, it means that the bank provides a loan to the client, subject to existence of contracts with foreign partners, in the wording and with the terms and conditions acceptable for TB and upon reviewing the creditworthiness of the contractual parties. Tatra banka enables to bridge the problem of liquidity during purchase of raw materials, manufacture, and export of manufactured products.
By refinancing, the client´s needs are bridged until the date of receipt of payment for the delivered goods. The export refinancing (or refinancing in the Slovak Republic) is performed on the basis of a credit-worthy customer or good payment or security instruments, as documentary Letter-of-Credit or bank guarantee issued by an acceptable bank. E.g. in refinancing under a documentaryho Letter-of-Credit, an exporter´s future export receivable is refinanced upon issuance of the Letter-of-Credit by a foreign bank, in the period prior to realisation of the exportu and upon furnishing of the documents prescribed by the Letter-of-Credit. The loan is short-term and allows financing up to 70% of the costs for performance of the contract in the currency demanded by the client. The loan is repaid upon receipt of payment from the customer.

When is refinancing of the contract appropriate:
This type of financing is approproate for larger single contracts, particularly in the event the client needs to bridge temporary increased need of capital (cash) for acquisition of material/raw material in order to be able to duly perform and fulfill the conditions of the contract.

Benefits of refinancing:

• the client raises capital for performance of the delivery in advance,
• monitoring of the foreign customer by the bank (monitoring of the overall risk of the country of export),
• consultancy and general support by the bank altready in preparation of the contract (with clients whose projects are regularly refinanced),
• complex roofing of the business transaction by the bank (contacts with foreign banks - customers´ banks, L/Cs, B/Gs ...)

For whom is the refinancing determined:

• particularly legal entities, export firms (building and machinery firms, companies supplying large investment complexes)
• companies which perform business activities mostly upon orders
• enterprises whose financial situation (or the balance of the cash-flow and payment conditions of the contract) do not allow them to realise the order from their own resources and payments from the customer