Trade Finance

Also read: Invoice Discounting | Confidential Factoring | Payroll Services | Export Finance

Trade finance connects the funding gap between the purchasing of goods and the final sale to the customer.

There are two effective types of trade finance – Purchase Finance and Letters of Credit.

Purchase Finance
This is a short term funding used against a confirmed customer order.
Normally it is available for:

• Importers and traders who are looking to find and supply goods within a short period of time.
• Non perishable goods that are finished and identifiable.
• Experienced trade businesses.
• Mainly for goods with high rate profit margins.

Advantages of this funding are:

• 100% finance (plus duty and VAT) will be provided.
• The trade financier relies heavily on the strength of the transaction for their security.
• It doesn’t affect the existing funding line.

Letters of Credit
To guarantee payment to the supplier Letters of Credit are sent to them so as to obtain the release of the goods. This is only available to importers and wholesalers who satisfy the following criteria.

• Where there is a written purchase order for the goods.
• Where the purchaser can be underwritten or credit insurance is available.
• Non perishable identifiable goods.
• Businesses that have experience in their trade.
• For goods that have high gross profit margins.

The benefits of this funding are:

• The forward order book can be turned into cash other than miss an opportunity.
• 100% finance (plus the duty and VAT) can be provided.
• A trade financier relies on the strength of the transaction, the order and the quality of the ultimate purchaser.
• The letters of credit will not affect the existing funding lines.

Whats your next step:

You can either use our online enquiry form or
contact us direct for immediate human contact on 0800 0735353.
You are under no obligation and you pay no fees until the commercial finance product is arranged.