Transforming Trade Finance for a European Soft Commodity Giant with Structured Trade Solutions

A Case Study on Just-in-Time Financing in the Soft Commodities Sector

The client, a large European company dealing in soft commodities, were looking for a solution to mitigate the challenges posed by prolonged inventory holding periods, which was blocking working capital and impacting the company’s liquidity position.  

CredAble executed a one-of-a-kind Structured Trade Solution in partnership with a leading financial services group in Europe. This case exemplifies how innovative Structured Trade Solutions can not only achieve critical financial objectives but also enhance efficiency across industries globally.

The Challenge

Like many businesses in the soft commodity sector, the corporate was facing significant challenges stemming from extended inventory holding periods. This was caused due to prolonged durations from procurement to liftoff.  

A misalignment between the procurement cycle (between September and October) and buyer liftoff caused inventory to remain on the corporate’s books for long durations.  

The extended holding periods resulted in: 

• Tied up working capital in inventory  

• Receivables distributed over a six-month liftoff period 

• Considerable pressure on the company's liquidity, constraining flexibility and growth 

Addressing these challenges was critical to unlocking financial efficiency and ensuring sustainable operations for the client. 

The Objective

The corporate needed a tailor-made financial solution to solve for the above challenges. CredAble’s Just-In-time Inventory Structure was identified as the ideal solution to achieve the corporate’s objectives. 

The key objectives included:

1. To unlock working capital and reduce the pressure on financials 

2. Ensure immediate realisation of sales without putting pressure on buyers 

3. To enhance the corporate’s liquidity and support operational continuity 

The Approach

CredAble adopted a meticulously planned and collaborative approach to execute the complex trade structure successfully and within the given time frame.  

The process began with the creation of a structure note and a detailed plan outlining the envisioned trade. The delivery was broken into two key components: drafting of contractual agreements and the execution of transactional documents.  

A dedicated core team comprising experts from the business, finance, and legal departments was formed to lead the project. Periodic scrums with both the bank and the client ensured alignment, addressed immediate action items, and maintained momentum toward the successful completion of the trade deal. 

Know more about CredAble’s Structured Trade Solutions

The Results

CredAble execution of the Just-In-Time Trade Solution delivered significant impact across financial, operational and strategic dimensions.

• First-of-its-Kind in the Nordics: This marked the region’s first deployment of a Just-in-Time trade finance structure, introducing a new financing model for businesses in this region. 

• 10-Day Execution Turnaround: The end-to-end trade—from structure note to execution—was closed in just 10 days, demonstrating CredAble’s executional agility and the successful collaboration with the financing bank.  

• Large-Ticket, Upfront Financing: The deal facilitated large ticket disbursements in place of staggered financing, reducing operational efforts and enhancing  the bank’s efficiency.  

• No Impact on Buyer Liquidity: The structure facilitated sales realization for the corporate within the financial year while strategically preserving buyer relationships by avoiding any financial burden on them.  

Think Working Capital… Think CredAble!