Trade Finance

Trade Finance is a highly effective way for businesses to fund the purchase of goods from overseas suppliers who require Letters of Credit to be opened before they supply those goods. Trade Finance also allows for purchase, distribution and invoicing through just one finance company, resulting in substantially reduced business running costs.

Trade Finance is an excellent solution when a business does not have the facilities to raise Letters of Credit for the supplier, yet has confirmed orders for those goods from reliable end customers.

If a Trade Finance company accepts the quality of confirmed purchase orders and is able to obtain Bad Debt Protection against end customers, it will be able to finance the purchase of the goods, include VAT and any duty payable.

Normally Trade Finance facilities are only available for purchases of finished goods. Repayments are usually linked to a period sufficient to cover both onward delivery to the approved end customer and for payment by the end customer.

Trade Finance facilities are frequently packaged with Invoice Finance facilities, so that the Trade Finance facility is repaid from the Invoice Finance advances when the customer invoices are assigned to the finance provider.

Costs are levied against the purchase price of the goods, so Trade Finance works at its most efficient when the importer is operating on good gross margins.

We can provide in-depth Trade Finance support, allied to recommendations as to precisely the right Trade Finance provider to match individual business needs and circumstances.