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TF - Module 1: Product Knowledge
UNIT 1: Trade Finance Product Overview
Unit 1 Topic List
1. What is Trade Finance?
1.1 Importance of Trade Finance in Global and Domestic Trade
1.2 Key Statistics
2. Trade Finance Products
2.1. Purchase Order Finance
2.2. Import & Export Finance
2.3. Supply Chain Finance
2.4. Inventory Finance
2.5. Letters of Credit (LCs)
2.6. Bonds & Guarantees
2.7. Financing Domestic Trade Supplier Transactions
2.7.1. Comparison: Import Finance vs. Domestic Trade Finance
3. The Trade Finance Cycle
3.1. Key Players in Trade Finance
3.1.1. Buyers (Importers)
3.1.2 Sellers (Exporters or Local Australian Suppliers)
3.1.3. Lenders (Banks and Non-Bank Financial Institutions)
3.2. The Trade Finance Process
3.3. Payment Structures to Sellers (Suppliers)
3.3.1. Upfront Financing
3.3.2. Partial Financing (Deposit + Balance)
3.4. Trade Finance Risks
3.4.1. Product Risk
3.4.2. Manufacturing Risks
3.4.3. Transport Risks
3.4.4. Currency Risks
3.5. Risk Mitigation Strategies
3.5.1. Insurance for Transport Risks
3.5.2. Currency Risk Management Tools
3.5.3. Payment Structures for Manufacturing Risks
3.6. Due Diligence
3.6.1. AML/CTF Compliance
3.6.2. Shipping Documentation Review
3.7. When Trade Finance is Not a Suitable Product for Client
3.7.1. B2C Operations
3.7.2. Low-Demand or Perishable Goods
3.7.3. High-Risk Countries
3.7.4. Consignment Sales
3.7.5. Certain Domestic Suppliers
4. Benefits and Applications of Trade Finance
4.1. Advantages for Businesses
4.1.2. Working Capital Optimisation
4.1.3. Cash Flow Management
4.1.4. Negotiation of Better Trade Terms and Pricing
4.1.5. Cost Reduction and Volume Discounts
4.1.6. Increased Trade Security
5. Assessing Trade Finance Suitability
5.1. Introduction
5.1.1. Suitable Scenarios
5.1.2. High-Demand Goods
5.1.3. Stable International Trade Routes
5.2. Choosing the Right Trade Finance Product
6. The Australian Trade Finance Landscape
6.1. Key Players
6.1.1. Major Mainstream Banks
6.1.2. Specialist Tier 2 Financial Service Providers
6.1.3. Shift Towards Specialist Financial Service Providers
6.2. Lender Considerations
6.2.1. Client's Financial Strength 6.2.1. Client's Financial Strength
6.3. Economic Impact
6.3.1. Role in Economic Development
6.3.2. Maintenance of Credit Flow in Supply Chains
6.3.3. Domestic Supplier Arrangements
6.3.4. Key Industries Benefiting from Trade Finance in Australia
6.4. Market Trends
6.4.1. Increasing Demand for Import Financing
6.5. Regulatory Environment
6.5.2. Key Regulations
6.5.1. Key Regulatory Bodies
6.5.3. Conclusion
7. Identifying Trade Finance Opportunities
7.1. Analysing Client Business Models
7.2. Recognising Trade Finance Needs
7.3. Matching Clients with Appropriate Lenders
7.1.1. Understanding Lender Preferences and Risk Appetites
7.1.2. Navigating Product Variations Across Lenders
7.4. Structuring Trade Finance Deals
7.4.1. Determining Appropriate Facility Limits
8. Wrap Up!
Quiz
UNIT 2: Understanding the Product
Unit 2 Topic List
1. Pre-qualifying the client/industry
1.1. Business Type and Structure
1.1.1 Primary Focus: B2B Operations in International Trade
1.1.2. Considerations for B2C Businesses
1.1.3. Company Size
1.1.4. Factors Influencing Size Requirements
1.1.5. Business Structure
1.1.6. Challenges with Non-Incorporated Structures
2. Industry and Sector
2.1. Manufacturing
2.2. Wholesale and Distribution
2.3. Commodities Trading
2.4. Less Suitable Sectors
3. Trade Finance – Paying Domestic Suppliers
3.1. Understanding Domestic Trade Finance
3.2. Common Scenarios
3.3. Domestic Trade Finance Solutions
3.4. Challenges and Opportunities
3.5. Considerations for Finance Brokers
4. Trade History, Experience and Financial Health
4.1. Established Track Record in Import Activities
4.1.1. Demonstrable History of Successful International Transactions
4.1.2. Evidence of Managing Currency Fluctuations and Cross-Border Logistics
4.1.3. Track Record of Compliance with International Trade Regulations
4.2. Consistent Volume of International Transactions
4.2.1. Regular Import Activities Rather Than One-Off Deals
4.2.2. Relationships with Reputable International Suppliers or Customers
4.2.3. Evaluating Trade Experience
4.2.4. Trade Finance - Payment to Domestic Suppliers
4.3. Financial Health
4.3.1. Stable Revenue
4.3.2. Year-on-Year Revenue Growth or Stability
4.3.3. Analysis of Revenue Sources: Domestic vs. International
4.3.4. Seasonal Patterns and Their Impact on Cash Flow
4.3.5. Revenue Quality Assessment
4.3.6. Healthy Profit Margins
4.3.7. Sound Balance Sheet
4.3.8. Cash Flow Management
4.3.9. Financial Reporting and Systems
4.3.10. Financial Strategy and Planning
5. Broker Considerations
5.1. Trade Cycle
5.1.1. Understanding the Client's Entire Trade Cycle
5.1.2. Analysing the Client’s Cash Conversion Cycle
5.2. Product Type
5.2.3. Preference For
5.2.4. Low Preference or No Appetite For
5.2.5. Evaluating Product Characteristics
5.2.6. Regulatory Considerations
5.2.7. Environmental and Ethical Considerations
5.3. Key Terms and Definitions
5.3.1. Letter of Credit (LC)
5.3.2. Bill of Lading (BOL)
5.3.3. Incoterms
5.3.4. Documentary Collection (DC)
5.3.5. SWIFT - Society for Worldwide Interbank Financial Telecommunication
5.3.6. Escrow
5.3.7. Red Clause Letter of Credit
5.3.8. Back-to-Back Letter of Credit
5.4. Key Features of Trade Finance Loans
5.4.1. Short-term Financing
5.4.2. Transaction-based
5.4.3. Self-liquidating Structure
5.4.4. evolving Facilities
5.4.5. Secured Against Goods
5.4.6. Flexible Amounts
5.4.7. Multi-currency Options
5.5. Insurances
5.5.1. Types of Insurance that May Be Required
5.5.2. Situations When Insurance Is Required
5.6. Government-related codes/regulation
5.6.2. Sanctions Compliance
5.6.3. Export Control Regulations
5.6.4. Foreign Exchange Regulations
5.6.5. Uniform Customs and Practises for Documentary Credits
5.6.6. International Chamber of Commerce (ICC) Rules
5.6.7. Data Protection and Privacy Regulations
6. Wrap Up!
Quiz
5.6.1. Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Regulations
UNIT 3: Excluded Industries Overview
Unit 3 Topic List
1. B2C (Business-to-Consumer) Transactions
1.1. Businesses that Sell to Small Retail Businesses
1.2. Businesses with Low Demand for Goods
1.3. Businesses that Import from High-Risk Countries
1.4. Businesses that Sell Products on Consignment
1.5. Sex Industry
1.6. Gaming Industry
1.7. Additional Considerations
2. Wrap Up!
Unit 9 Pop Quiz: Excluded Industries
5.6. Government-related codes/regulation
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