Although the bank has a security interest in the goods under the usual terms of a trust document, the client takes possession of the goods and can do whatever they want with them as long as they do not violate the terms of their contract with the bank. When it decides to terminate the Bank`s security interests and attach itself to the inventory, it can tender for the advanced amount on the goods, which gives it full ownership of the goods. The proof of the trust serves as a debt title to the bank, namely that the amount of the loan is repaid on the sale of the commodity. The bank pays the exporter at its end or issues a creditor to the seller (or the seller`s bank) guaranteeing payment of the goods. However, the lender reserves ownership of the goods as collateral. The customer or borrower is required to separate the goods from their other stock and to hold and sell the goods as agents of the bank. Banks generally do not hesitate to lend in trust. Because it is certain that the money will be repaid with interest as soon as the goods are sold. This is a win-win situation for both the bank and the borrower, as the bank receives money in the form of interest and the business earns money without having to invest in the first place. The first and the first step, therefore, is to ensure that the borrower has the necessary documents to use the trust, which is why the conditions would be the most basic: maturities under fiduciary income are short-term and range from 30 to 180 days. At maturity, the client must repay the loan to the lender with interest determined according to the terms of the trust title. The bank must be reimbursed at the time of maturity or after the sale of the goods, depending on what happens earlier. If the bank has not received a payment after the due date or if the company is in late payment at the time of payment of its advances, the bank could take back the goods and sell them.
During the normal conduct of a commercial transaction, companies purchase goods for their inventory from sellers or wholesalers in order to resell them or manufacture goods to the consumer. These goods can be purchased locally or imported by other companies. When these companies receive the goods, they are also charged by the seller or exporter for the products purchased. If the company does not have the cash to pay the bill, it can obtain financing from a bank through a trust receipt. A confidence document is a financial proof that is taken care of by a bank and a company that has received the delivery of goods, but which can only pay for the purchase after the sale of the stock.