What We Do

SynCap acts as an alternative liquidity provider in the US$4 trillion+ per year physical commodities trading market by investing into high credit quality, short-term, self-liquidating commodity trade financing transactions within Europe, North America, and the Mediterranean and Black Sea regions.

Our Focus is on:
Transactional Commodity Trade Finance

Transactional Commodity Trade Finance is the financing of trade flows, on a self-liquidating basis (meaning that repayment results from the sales-proceeds of the goods being financed, collected directly by the Lender) and whereby monitoring takes place per individual transaction, during each stage of the flow.
The flows can cover multiple geographies and have numerous origins and destinations.
In general, the following financing stages are identified:

Production / performance / prepayment stage X
Logistics stage (including in-land and vessel transit, freight and ancillary charges) V
Receivables stage (including export L/C-backed, credit-insured or open account receivables) V
Margin financing (commodity price hedging agreement) X
Foreign exchange or interest rate hedging financing X

Within transactional commodity finance Syn-Cap will provide finance for only logistics and receivables stages. Syn-Cap will not engage in margin or hedging financing or prepayment stage. The main security/collateral is provided by a security interest over the financed goods and accounts receivables. Sub accounts will be opened for each obligor, which are solely controlled by SynCap’s management, to ensure self-liquidation of the transactions. Suppliers will be paid directly from these accounts and receivables of the transaction will be received on the same account. However, due to the dynamic nature of the financed transactions (moving goods), primary focus remains on maintaining robust procedures and mechanisms to maintain operational control over the goods financed and the collection of the sales proceeds.

The operational controls and structuring around the physical transaction lie at the heart of transactional finance. Via a successive reporting of movement through the propriety IT system, Syn-Cap is able to follow each transaction and know at any time exactly where the goods are located. This, combined with a level of documentary control/transfer of title, provides the main credit comfort. Thus, the supplier, route, destination, buyer and sales instrument should correspond to the desired (Investment Committee approved) risk level.