New Entrant Joins Bunker Financing Market With $2 Million Deal

The bunker industry relies on credit for its operations. File Image / Pixabay

A new entrant has joined the market to provide the bunker industry with its financing needs, setting up a $2 million credit facility.

Germany-based Tradewind Finance has joined the market for the first time and arranged a $2 million credit facility for an undisclosed international bunker trading firm, it said in a statement on its website on Monday.

The firm was founded in 2000, and has offices in countries all over the world.

"We are proud to provide a factoring solution for our new client, enabling them to expand their customer base using the additional cash flow from the facility," a company representative said in the statement.

"With the facility in place, our client can concentrate on growth, knowing their invoice collection is covered, and does not have to wait long periods for their buyers to pay.

"Factoring with Tradewind has taken care of this.

"Other bunker traders are currently looking very closely at using these factoring facilities, so we are excited at the prospect of expanding more in the bunkering business."

The bunker industry relies on credit for its operations, with payments typically made several weeks after fuel is delivered to the receiving ship, and the prospect of dealing in more expensive alternative fuels will only make this need more pressing in the coming years.

Traditional lenders have to some extent withdrawn from commodity trade finance in recent years after shocks including the collapse of Hin Leong and GP Global, and new entrants to this market will be needed to make up the shortfall.