Menu
Trust Receipt
Trust receipt unlocks cash flow by allowing companies to buy expensive goods like equipment and automotive for manufacturing or sale purposes with short-term financing. Without paying large amount upfront, companies can take possession of the inventory for manufacturing or sale before paying it back to the bank at maturity.
A trust receipt is a document that allows a borrower to take possession of goods that are being financed by a lender. The borrower holds the goods “in trust” for the lender until the loan is repaid.
The purpose of a trust receipt is to provide security for the lender, as it allows them to take legal ownership of the goods if the borrower defaults on the loan.
A wide range of goods can be financed with a trust receipt, including inventory, equipment, and raw materials.
The borrower takes possession of the goods and signs a trust receipt, which gives the lender a security interest in the goods. The borrower is responsible for storing, maintaining, and insuring the goods until the loan is repaid. Once the loan is repaid, the borrower takes full ownership of the goods.
A trust receipt is a type of loan, but it is specifically designed to finance goods. The borrower takes possession of the goods and holds them in trust for the lender until the loan is repaid.
The repayment term for a trust receipt can vary depending on the lender and the amount borrowed. Typically, repayment terms range from 30 to 180 days.
Interest rates can vary widely depending on the lender and the borrower’s creditworthiness. Typically, interest rates for trust receipts are lower than those for unsecured loans, such as credit cards or lines of credit.
Yes, a trust receipt can be used to finance imported goods, as long as the goods are being held in a bonded warehouse.
If you default on a trust receipt, the lender can take legal ownership of the goods and sell them to recover the loan amount. Contact us for customized solutions specifically tailored to your needs today.
