Trade Solutions

Buy and sell overseas with confidence

The world could be your market if you have the right tools to mitigate risks, strengthen trade relationships and arrange secure payment terms. As access to markets improves, extending your reach to new territories or sourcing raw materials from cheaper sources become attractive options. However, the risk, cost, time, cash flow constraints and lack of information remain a concern. We offer the products and solutions to help you buy and sell overseas with confidence.

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When involved in international trade, you need to ensure that you can safely, quickly and conveniently send or receive payments.

This helps to build trust between buyer and seller as well as speed up trade transactions so you can start generating income from goods sold or inventory purchased. We provide several remittance options to suit your needs.

Outgoing and Incoming Wire Transfers

Our wire transfer solutions allow you to send or receive large sums of money quickly and securely and may be made to almost anywhere in the world and in any currency.

Wire Transfers can be completed at your branch or via our internet banking solution.

Required information for this type of transaction usually includes

Beneficiary bank name and address:

This is the bank where the business to whom you want to send a wire transfer holds their account.

Receiving/beneficiary bank name and ABA Routing Number or Swift Code:

Depending on the processing procedures of the receiving/beneficiary bank, both the ABA Routing Number and Swift Code may be required.

IMPORTANT NOTE: Many banks use an intermediary or "receiving" bank to facilitate their wire transfers. If that is the case with the wire transfer you wish to send, please be sure to provide the receiving bank's ABA Routing Number or Swift Code. Do not use the final beneficiary's bank information as that may create a significant delay in processing.

Beneficiary name and account number

The full name of the business to whom you are sending the wire and the account number where the funds are to be sent.

If you require clarification on the process and information required to complete a Wire Transfer, please call your relationship manager or contact your branch.

Bank Drafts

We issue bank drafts in domestic and foreign currencies.

Bank drafts can be used to make a payment to a third party in almost any currency, both locally and abroad.

Bank drafts offer a convenient and secure means of payment, and are more easily negotiated than cheques written on your business account and are less vulnerable than cash to loss or theft. Additionally, the amount is already paid for in full before the draft is issued, ensuring its clearance and credibility.

To request a bank draft, please call your relationship manager or contact your branch.

Business Credit Cards

We offer a variety of credit cards to suit your business needs. Choose the card that works best for your business and enjoy convenience, security and value. For more on business credit cards click here

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When establishing relationships with new vendors and suppliers, there are services we can extend to help position your business ahead of competitors in the industry and/or give your vendors and suppliers peace of mind that obligations would be met while they develop a working relationship with you. Our wide range of trade solutions including letters of credits, bonds and guarantees also help you reduce risks associated with international trade transactions.

We can help you to:

Avoid paying for goods that never show up
Mitigate against exporting goods expecting a payment that never arrives
Give your international suppliers the assurance that you are backed by a reputable financial institution
Continue to trade on open account terms

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The Documentary Letter of Credit (DLC) is a written undertaking by our Bank to guarantee payment to a seller/exporter (beneficiary). It reduces credit risk associated with international trade transactions by substituting the applicant’s credit worthiness for the bank’s.

Benefits:

Applicant (buyer/importer) – The applicant can specify what requirements or conditions must be met by the beneficiary in order to receive payment Payments will be made only upon presentation of documents confirming shipment and the seller/importer is required to fulfill all the terms indicated in the letter of credit in order to receive the payment.

Beneficiary (seller/exporter) – The beneficiary can use the Letter of Credit (LC)as an irrevocable guarantee of payment and can feel confident trading with the applicant. Essentially, the credit risk is transferred from the buyer to the buyer's bank.

*Payment under an LC is based on documents being properly presented within a specified time and not on the terms of sale or the physical condition of the goods.

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Stand-by letter of credit (SLC) is a written undertaking by a bank providing an irrevocable guarantee of payment to a seller/exporter (beneficiary) but is not tied to any particular transaction. It is often referred to as a performance letter of credit because it is only used should the buyer fail to pay as agreed.

Types of Stand-by Letters of Credit

Financial standby letters of credit - Undertakings issued by the bank on behalf of clients to provide certainty to 3rd parties that the applicant can meet financial obligations e.g. collateral for surety
Non Financial standby letters of credit - Undertakings issued by the bank on behalf of clients to assure 3rd parties of the customers ability to perform under bids and contracts e.g. guarantees for land development/ bid or tender guarantees

Benefits:

Beneficiary (seller/exporter) – The beneficiary can use the Letter of Credit as an irrevocable guarantee of payment and can feel confident trading with the applicant. Essentially, the credit risk is transferred from the buyer to the buyer's bank.

Additional Benefits:

Exporters selling solely to one foreign buyer face a "concentration" risk, should the one buyer become insolvent for any reason. A stand-by letter of credit, issued in your favour by the buyer's bank, would offer you increased security.
A standby letter of credit guarantees a predetermined amount of money; if your buyer defaults on their credit terms, you can be paid for the goods you've already shipped, up to the amount guaranteed by the standby letter of credit.

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A customs bond guarantees the payment of import taxes and duties on goods shipped by suppliers. It also assures compliance with all regulations and laws governing the entry of merchandise from overseas. A customs bond is a financial guaranty between 3 parties:

The Business Clients - the Principal (who is required to file the bond)
(RBC Royal Bank) - The surety company issuing the Customs bond
The institution/agency responsible for customs in the country

The Customs bond guarantees the customs agency that, if they cannot collect monies due from the Principal, they can seek remedy, up to the bond amount, from the bank.

Benefit:

This enables a company to import goods from overseas for commercial purposes and clear goods from the port before payment of duty is made as payment is assured with the bond.

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RBC Royal Bank offers a variety of guarantee solutions

Bid, Performance and Advance Payment Guarantees, Bid Bonds or Tender Guarantees

Bid Bonds or Tender Guarantees - To ensure that suppliers submit serious offers, tenders often call for up-front cash deposits or irrevocable guarantees. With an RBC Royal Bank bid guarantee, you can establish your credibility without tying up your cash.

Performance Bonds or Guarantees - Successful bidders often require a performance guarantee for a percentage of the contract amount. RBC Royal Bank enables you to meet your contract requirements and assures your client of your ability to perform.

Advance Payment Guarantees - If you require an advance payment from your client, an RBC Royal Bank guarantee assures the client that their advance will be repaid by RBC Royal Bank if you fail to meet your contractual obligations.

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As an importer, you may have concerns about conducting business and negotiating payment terms with unfamiliar foreign suppliers. You need to ensure the goods have been shipped and the supplier has met the terms of the contract. Through Import Documentary Collections, RBC Royal Bank acts as an intermediary in the purchase process, providing you with an opportunity to review key documents before paying your supplier.

As an exporter, it is important to consider the credit risk of your foreign buyer. But it's not always possible to receive cash in advance for your goods. Through Export Documentary Collections, RBC Royal Bank and the importer's bank act as intermediaries, and payment for international transactions are processed through both financial institutions.

Call your nearest branch to get further details on how RBC Royal Bank will work with your business to reduce your risk and provide you with peace of mind.