Maturity under fiduciary income is short-term and ranges from 30 to 180 days. At maturity, the client must repay the loan to the lender with interest determined according to the terms of the trust title. The bank must be reimbursed at the time of maturity or after the sale of the goods, depending on what happens earlier. If the bank has not received a payment after the due date or if the company is in late payment at the time of payment of its advances, the bank could take back the goods and sell them. During the normal conduct of a commercial transaction, companies purchase goods for their inventory from sellers or wholesalers in order to resell them or manufacture goods to the consumer. These goods can be purchased locally or imported by other companies. When these companies receive the goods, they are also charged by the seller or exporter for the products purchased. If the company does not have the cash to pay the bill, it can obtain financing from a bank through a trust receipt. You will not receive a trusted credit unless the minimum of the above documents is disclosed. In practice, it is not possible to obtain customs clearances for the export of goods to the customer without actually producing the goods. The proof of the trust serves as a debt title to the bank, namely that the amount of the loan is repaid on the sale of the commodity. The bank pays the exporter at its end or issues a creditor to the seller (or the seller`s bank) guaranteeing payment of the goods.
However, the lender reserves ownership of the goods as collateral. The customer or borrower is required to separate the goods from their other stock and to hold and sell the goods as agents of the bank. Trust entry financing is the working capital of importers. It is advantageous for the importer to want to use the goods as a raw material for production or to market the goods before paying for them. The importer must repay the loan on the agreed date. Loan Against Trust Receipt (LATR) is a short-term loan granted to the importer to pay for imported goods. Ownership of the goods is held by the bank until the importer pays, but the buyer can take possession of the trust goods on resale before paying the bank on the attR due date. LATR funding applies to products imported under documentary credits. The import loan can be divided into two main categories: Trust Receipt or TR is a document that comes into play when a buyer has a loan or other agreement, such as. B the letter of credit (LC), from a bank to buy an asset or a commodity.