For many exporters, CAD financing/TT funding has been and continues to be a successful option.
Cash Against Document
CAD financing, or cash against document/telegraphic transfer (CAD/TT), is a funding option in which an importer pays for their products or goods ("goods") before receiving them. Having a third party accept the shipment and title documents for the exported goods ensures protection for both the exporter and importer.
The buyer or importer does not receive the goods until they have completed the payment. Similar to a real estate transaction, the CAD/TT option involves a third party holding the funds in escrow until the completion of the transaction.
Minimizes Risk
This funding option minimizes risks for the exporter, as they can be assured that payment will be received before the goods are released. Additionally, it fosters trust between both parties, as they are relying on a neutral third party to facilitate the transaction.
This arrangement not only enhances security for the exporter but also encourages smoother communication and coordination throughout the shipping process. As a result, the parties can focus on building a long-term business relationship rather than worrying about potential payment issues.
The Funder has Temporary Custody of the Shipment
Generally, CAD/TT financing does not require credit insurance (for example, Euler); the collateral in such cases is the container itself (because the funder has temporary custody of the shipment’s original documents).
The funder's ability to hold the original documents provides a level of security, allowing them to mitigate risks associated with the financing arrangement. This approach can streamline the process for businesses looking to secure funding for their shipments without the added complexity of credit insurance.
More Information
For more information about CAD financing, please contact a member of our team, and they will be delighted to assist you with all your export funding needs.
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