If your business both imports and exports, Trade Finance is an option to help fund your entire sales pipeline.
Trade finance is sometimes known as supply chain finance, because you get a finance partner for the whole supply chain rather than just one part of it.
In essence, the trade finance partner acts as an intermediary between your business, the manufacturer, and your end customer, funding the transactions throughout the process — so you can do cross border business without needing a large reserve of working capital. The facility is not limited to foreign trade, it is also used for domestic situations.
Trade finance generally works on a confirmed order basis — so if you’ve got a purchase order to fund it’s a useful type of working capital finance set up specifically for international trade. However, there are options for general stock consignments, so please speak to us to discuss further.
Finance for importers
If you’re dealing with overseas suppliers, they may demand payment up-front, or perhaps they have a minimum order size that would stretch your finances. Import finance could help you place big orders with suppliers without worrying about having a big reserve of cash. In a nutshell, import finance allows you to close the cashflow gap between a UK customer placing an order (on credit terms), and the payment demanded by your overseas supplier.
Finance for exporters
Cashflow can be a bigger problem for exporters as goods have much further to travel, face customs checks and often payment terms in the country you are exporting to may be longer than those in the UK. Finance options are available on rolling or individual invoice terms to help ease that cash flow gap.
Benefits of trade finance:
- Combination of import finance and export finance
- One lender financing your whole supply chain
- Pay suppliers early while offering payment terms to buyers
- Improved buying power – negotiate improved prices
- Lending based on creditworthiness of your customers