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Government receivables: Building business resilience with cost-effective funding
Today’s global trade environment is marked by increasing complexity and unpredictability, driven by evolving tariff policies, geopolitical tensions and shifting supply chains. These factors create significant challenges for businesses, including disrupted cash flows, delayed payments and heightened financial risks. Agile financial strategies are essential for businesses to maintain liquidity and resilience.
Enhancing business stability with government receivables
Amidst shifting market conditions, governments receivables can offer an alternative trade finance option for businesses seeking greater stability in their cash flows. HSBC’s structured trade finance solutions, which can be tailored for government projects and receivables, provide businesses with a powerful lever to navigate economic headwinds, enabling them to:
HSBC’s structured trade finance solutions for government projects
We offer tailored structured trade finance solutions designed to help businesses leverage government contracts for improved financing terms.
Three key considerations for successful deals:
Date certainty
Clear knowledge of when the government will make payments
Amount certainty
Confirmation of exact payment amounts
Permission to assign receivables
Ensuring the government allows receivables to be assigned to the bank for financing
Key benefits
- Lower funding costs:
Competitive financing rates based on government credit strength - Optimised liquidity:
Frees up credit limits for other financing needs
Case study
Background
A leading construction company, specialising in public housing projects, needed a way to manage cash flow efficiently during a major five-year government contract. To support their needs, HSBC set up a receivables finance programme, with credit limits based on the Hong Kong SAR (HKSAR) Government’s creditworthiness.
How it works
Key outcomes
- The programme leverages the strong credit rating of the HKSAR Government, allowing the company to access preferential rates.
- The company receives payment earlier, helping them manage project expenses and payroll without waiting for government payment cycles..
At HSBC, proudly the world’s largest trade bank, we believe it is our responsibility - especially in times like these - to help our clients navigate this challenging environment. This includes providing market analysis and sharing best practices from other customers in similar industries.
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Using government receivables for financing offers an alternative way to secure reliable and cost-effective funding during uncertain times, helping businesses manage cash flow more effectively.
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Partnering with HSBC means accessing our extensive market expertise, combined with continuous investments in our digital trade platforms and innovative financing solutions, helping you remain agile in an ever-changing economic landscape. To explore how our government receivables finance solutions can strengthen your liquidity and safeguard your operations, contact your relationship manager today or visit this link to learn more.
