ITFA unveils new template to streamline short-term trade loans via SWIFT

ITFA unveils new template to streamline short-term trade loans via SWIFT - Trade Treasury Payments

The International Trade and Forfaiting Association (ITFA) has launched a new template designed to bring greater clarity and standardisation to short-term trade loan transactions executed via SWIFT MT799 messages.

In cross-border trade finance, short-term loans between banks—often supporting corporate clients in emerging markets—are typically documented through free-form SWIFT messages. However, until now, there has been no widely accepted industry format for these standalone instruments. This has led to banks developing disparate documentation standards tailored to specific jurisdictions, sometimes increasing legal and operational risk.

Rather than prescribe a one-size-fits-all solution, the new template offers what the group describes as a “what good looks like” model. This is a flexible, practical starting point that parties can tailor as needed. It supports clearer communications between borrower and lender banks when initiating standalone trade loans via SWIFT, particularly in new or first-time relationships.

Designed for flexibility, not to replace existing frameworks

Unlike the BAFT Master Trade Loan Agreement (MTLA), which offers a master framework for ongoing trade loan activity, the ITFA template is intended for one-off transactions with minimal documentation.

It uses optional clauses and provides guidance for common variations (e.x., floating-rate structures and jurisdiction-specific governing laws) while aiming to remain concise and accessible.

Geoff Wynne, Partner at law firm Sullivan, drafted the template alongside support and input from ITFA and the broader industry, including contributions from FCMB Bank (UK) Limited, which offered its existing format as a foundation for the working group’s deliberations.

ITFA members can now download the template from the organisation’s website. For further information or questions, members are encouraged to contact the ITFA Market Practice Committee at info@itfa.org.