Trade Finance

Trade finance could give you the cash you need to pay your suppliers and help you fulfil customer orders, without being out of pocket for possibly weeks. Trade finance is a type of working capital finance, it could provide you with the cash you need to buy inventory or stock from a supplier.

Once you have a purchase order from a customer, trade finance can provide the funds you’ll need to buy the stock or inventory needed to fulfil the order. Which means that goods can be shipped immediately, and you won’t be left short of funds while waiting for your customer to pay you.

For example, imagine that you receive a big order from a well-established and creditworthy new customer, but you don’t have the funds to pay your supplier in advance of getting paid yourself. The trade financier will assess your business and examine the purchase order from your customer. Once they’re satisfied that everything is in order, they order the products from your supplier.

With trade finance in place your supplier invoices the trade financier for the shipped goods, and is paid quickly, so the goods can be delivered earlier. Once your customer pays the trade financier they deduct their fees and pay the surplus left to you.

if you’re importing or exporting, trade finance could be a great help in managing your cashflow, it can also be used with other forms of finance that your business may have such as invoice finance or asset finance.