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Trade Solutions

We offer invoice discounting as a working capital solution to help address cash flow issues experienced as a result of the lag that exists between the supply of goods and services and receipt of payment. 

HOW IT WORKS
  • A supplier is contracted to supply to a buyer on credit terms 
  • Supplier issues an invoice and proof of delivery which is then presented to the Bank for financing 
  • Zanaco finances up to 70% and books a loan aligned to the collection period 
  • On the due date of the Invoices, the buyer channels the proceeds into an account held at Zanaco after which the Bank liquidates the loan along with interest 
BENEFITS 
  • Improved cash flow 
  • Reduced collection period 
  • Ability to extend credit terms 
  • Opportunity to grow the business 

Local Purchase Orders are a steady and assured form of pre-delivery financing to meet your working capital and liquidity needs in order to execute orders. 

HOW IT WORKS
  • Supplier approaches Zanaco with a confirmed order from a reputable buyer (anchor corporate) and assigns the receivables to the Bank 
  • Buyer provides a letter of undertaking to channel proceeds of the orders into a Zanaco account after which the Bank finances the order with 60% paid directly to the suppliers and 10% to the customer for operational expenses 
  • The Bank books the loan in line with the collection period from the anchored on due date of the supplier order, liquidates the loan using anchor’s payment 
 BENEFITS
  • Opportunity to grow the business 
  • Improved customers liquidity position 
  • Ability to deal with suppliers that demand upfront payment 
  • Affordable source of working capital compared to traditional lending solutions 

A Letter of Credit (LC) is a contingent commitment by a Financial Institution at the request of the applicant to pay a supplier a specified amount of money under specified terms upon presentation of compliant shipping documentation.

Zanaco offers LCs with our listed reputable worldwide correspondents when dealing with unfamiliar sellers/suppliers to ensure that payments are only made after compliant shipping documents have been received. 

We also offer Import Loans to enable customers meet their due LC bills. Our services include LC confirmation, negotiation, advising and relay. 

HOW IT WORKS
  • A buyer gets into a contract to purchase goods from an unknown supplier 
  • Supplier request for LC as security payment 
  • Buyer then approaches Zanaco and applies for an LC 
  • Zanaco issues the LC to the supplier’s Bank for advising to the supplier 
  • Once advised, the supplier dispatches the goods along with shipping documents to Zanaco 
  • Zanaco examines the received documents in terms and conditions 
  • Upon confirmation of compliance, Zanaco pays the beneficiary either at sight, or due date if LC is available by usance or deferred payment 
BENEFITS
  • Credit risk is taken up by the Bank 
  • Assurance of paying for goods after they have been shipped 
  • Security as the payment is only made against compliant shipping documents 

A guarantee is a contingent commitment by a Bank on behalf of an applicant to pay a specified sum of money to a beneficiary upon receipt of a compliant claim indicating applicant’s default in its obligation/s. We offer all forms of guarantees including bid, advance payment, performance and payment guarantees.

How Different Types of Guarantees work 
Bid Bond 
  • When a beneficiary (employer) puts out a tender, a pre-condition for bidders to submit a bid bond as part of the application documents is set 
  • The contractor will engage the Bank to issue the bid bond as a guarantor 
  • Should the contractor be awarded the tender and declines it or withdraws the application after being awarded, the beneficiary will demand for compensation from the guarantor 
  • Upon the guarantor determining that the demand is compliant, it would honour the demand by paying the beneficiary 
Advance Payment 
  • After contract award, some contractors would need advance funds to mobilise expenses in order to commence the works 
  • As a security for the payment, the beneficiary would request for an advance payment guarantee. 
  • Should the contractor misuse the advance funds, the employer would demand for compensation from the guarantor 
  • On receiving a compliant demand, the guarantor would be obliged to compensate the beneficiary 
Performance Bond 
  • The contractor is obliged to execute contract performance upon being awarded the contract with an advance payment 
  • As assurance to the beneficiary that the contractor will perform all its contractual obligations, the contractor would be required to provide a performance bond issued by a guarantor such as Zanaco 
  • Should the contractor fail to perform, beneficiary would demand for compensation from the guarantor 
  • Upon the guarantor determining that the demand is compliant, it would honour the demand by paying the beneficiary 
  • Payment 
  • Some organisations and distributors would enter into distributional contracts with suppliers 
  • In order for suppliers to advance stock to such organisations on credit terms, they would demand for a payment guarantee 
  • Upon advancing stock to the distributor and the distributor fails to pay the supplier on due date, the supplier would demand for reimbursement 
  • Once the Guarantor determines that the demand is compliant, it would honour the demand by paying the beneficiary  
  • After the contractor has completed its contractual works, the beneficiary would need protection that the contractor will carry out all necessary work to correct any structural defects discovered immediately after project completion 
  • Beneficiary/employer would request for a retention guarantee so that if contractor fails correct the defects, they would demand for compensation under the guarantee 
  • Upon the guarantor determining that the demand is compliant, it would honour the demand by paying the beneficiary 
BENEFITS
  • Bid bonds allows both local and foreign companies to qualify for a tender bid 
  • Advance payment guarantees enable clients to qualify for advance funding 
  • Performance and retention help improve the credibility of a client to perform under the contract 
  • Payment guarantees enable clients to hold on to cash which they can use for other business opportunities while drawing stock 
  • As the services are off balance sheet contingent liabilities, the company maintains a good gearing position