FAQ | International Trade
From Trade Financing to Letters of Credit (LC) Discounting, there are many questions about International Trade. Our team at Rubican has answered some of the most frequently asked questions in our FAQ below.
Whether you’re importing to Canada or hoping to become an exporter, we’ve provided some of the basics below.
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INTERNATIONAL TRADE FAQ
What is Trade Financing?
Trade Financing is a catch-all term for several credit solutions that banks and shipping companies use to make international trade possible. Many international product shipments make it from factory to their final destination under Trade Financing terms.
Trade Finance often reduces the risk that both importers and exporters experience by allowing a third party to handle shipment payment terms. These third party companies (like Rubican) will handle the financing on both ends and take a small percentage of the arranged loan as payment.
Most importers prefer to keep their cash flow liquid. By entering into Trade Finance agreements, they’re able to rely on credit to maintain their cash liquidity. Rubican focuses on Letters of Credit (LC) Discounting and Short-Term Revolving Loans. These services are generally intended for 30-60 day international shipments between established import and export partners.
Why Wouldn't I Just Work with EDC or my bank?
Every business has unique needs. Rubican has found a niche in helping Canadian exporters identify new buyers, suppliers and forms of financing for shipments. Many banks offer these types of services but are often restrictive in who they work with. We’ve helped companies that have been around for decades that, for one reason or another, didn’t qualify for a bank partnership.
EDC is an exceptional partner for established international companies based in Canada. However, there are many steps businesses need to complete before EDC will work with them – we help businesses take those steps so they can eventually qualify for EDC support.
What is the relationship between Rubican, your bank, and your Freight Company?
In many cases, Rubican’s finance expertise will help importers and exporters secure letters of credit and short-term revolving credit. We work with international banks to secure terms so your cash flow remains steady and intact while shipments are in transit.
Once we’ve secured credit terms, we’ll work with your Freight Company to ensure supply chain shipments are smooth and on schedule.
What is Freight Forwarding?
Freight Forwarding is the shipping part of Logistics. Freight Forwarders (like Sealion Cargo) will link up shipments from their origin to final destination. There are often multiple steps in a shipment’s journey and Freight Forwarders identify the routes to make these steps happen.
Because of the vast amount of shipping options, prices and variables, Freight Forwarders specialize in fitting the right options to each customer.
How Does Rubican Help Me Buy and Sell More Internationally?
Together, Rubican’s team holds decades of international logistics and finance experience. Our close relationships with buying agents in Canada and globally give us an edge in acquiring additional suppliers and better bulk rates for products.
We work with businesses of many sizes to provide detailed insights into global supply chains.
What is the relationship between Rubican Global Trade and Sealion Cargo?
Rubican was originally the Trade Services division of Sealion and we still work closely with them on many international logistics projects. With our team’s extensive Logistics background, we’re able to help small to enterprise scale businesses optimize their global supply chains. On many projects our partners at Sealion Cargo are able to provide competitive freight rates on secure and swift shipping channels.