The borrower's balance sheet is of course important
- if it is not sound then not much else is likely to be sound either. But in any
case international trade finance for coffee producers and exporters is nearly
always, if not exclusively, based on realizable
collateral security. Only very large 'blue chip' companies can obtain
substantial credit lines on the strength of their balance sheets. At the other
end of the borrowing scale are those who can obtain only fully collateralized credit (sometimes only
against offsetting sales) because there is less balance sheet security.
Less substantial and smaller firms will usually be
subject to detailed day-to-day scrutiny by both banks and collateral managers -
more substantial or highly secured borrowers
will fall somewhere in-between.