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MUHAMAD ZULHILMI BIN MOHD YUSOFF
A157288
MUHAMMAD ZULFITRI BIN RUSTAM AFANDI
A158098
NUR AFIQ BIN AHMAD LATIFI
A163115
Countertrade vs Working Capital Financing
-1-
LET’S CHECK IT OUT! WHAT IS COUNTERTRADE?
Countertrade is a reciprocal form of international trade in which goods or services are exchanged for other goods or services rather than for hard currency. 
Countertrade can be classified into few categories
1. Barter
2. Counterpurchase
3. Offset
“Hye, I’m David. Now let me explain what is the barter system in countertrade.”
BARTER: is a kind of trading system in which goods and services are directly exchanged against any other goods and services of the same value without the involvement of currency of money. 
“Okay, now let me explain about counterpurchase”
Under a counterpurchase agreement, the exporter sells goods or services to an importer and agrees to also purchase other goods from the importer within a specified period. Unlike bartering, exporters entering into a counterpurchase arrangement must use a trading firm to sell the goods they purchase and will not use the goods themselves. 
For example
On a condition for Russia
RUSSIA must buy a certain amount of palm oil from MALAYSIA
MALAYSIA agreed to buy jet from RUSSIA
It is as part of payment on trade transaction
“Hye, let me explain about offset system”
Offset is widely used in high technology products. It occurs once a seller of a product to be imported into a foreign country agrees to purchase part or materials used to produce the product. 
An offset arrangement may also be referred to as industrial participation or industrial cooperation.
Example related to the offset:
Malaysia allowed Germany to export its BMW cars to Malaysia, with condition that BMW must agree to but 10%-30% Malaysia made car component.
Exports - Imports
The item that have been bought cannot shipped back to the owner even thought it is in different forms.
2 - Next, let’s check it out!
What is working capital financing/loan?
Loan that is taken to finance a company’s everyday operations. These loans are not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a company’s short-term operations.
~HOW A WORKING CAPITAL LOAN WORKS?
Sometimes a company does not have adequate cash on hand or asset liquidity to cover day-to-day operational expenses and, thus, will secure a loan for this purpose.
Companies that have high seasonality or cyclical sales usually rely on working capital loans to help with periods of reduced business activity.
SIMILARITIES
Counter Trade and Working Capital Financing
-With working capital financing you can easily apply for a working capital loan online and will have to submit only a few documents. As a result, the process is easier for you and funds are disbursed faster. 
-With counter trade, it allows for entry into difficult markets and it makes you easily to get financing.
Make it easier to get financing
DIFFERENCE
Counter Trade and Working Capital Financing
1. Working capital loan is a loan that is taken to finance a company’s everyda operation (cost such as payroll, rent and debt payments) WHILE countertrade is for exchanging goods and services which are paid for in whole or part, with other goods or services rather than with money.
2. Working capital is for short term used, while countertrade mostly for long term agreement.
Which scenario best to use?
-The best scenario to use countertrade and working capital financing/loan is when they want to minimize foreign-exchange risk.
THANK YOU