While Lending business activities are in general cases recognized within the Balance sheet (of the Bank as well as the Client), other Lending products that were originally derived from Export finance needs have evolved into separate category of the Banks business activities and are distributed to customers by means of Trade Finance channel. For those products, there is valid assumption that they are rather recognized Off the Balance sheet, due to fact that either the risk has been transferred out of the books onto another entity (Factoring) or the settlement of trade contract is conditional and will materialize in the future (Letter of credit).

Such products are more complex in terms of structuring, loan documentation and commonly they are concluded based on internationally agreed terms incorporated under INCOTERMS or another respective platforms. These products are in certain sense combination of each other respectively they are coming out of joint principles and represent minor derivation in order to service the clients needs. Main categorization of those products consists of:

• Documentary business (Trade Letter of credits and Bank guarantees)
• Factoring/ Forfaiting
• Receivables insurance.

This section will provide explanation for all those mentioned products as they play an important role in international trade, but their usage in practice is not really straight-forward for understanding, without corresponding knowledge of these products when compared with regular On Balance-sheet financing (like Loans, Bonds etc.).