Like invoice financing, there are numerous variables within the trade finance markets. Finding the right provider for you with so much competition can be very confusing but due to our close relationship with our partners, we are aware of each partner’s specialities within the market and will match them to your business needs accordingly.
Traditional Trade Finance
Traditional trade finance allows businesses with firm purchase orders from their clients, purchase goods and supply their client without sacrificing their entire cash flow.
Many companies when growing, struggle to cope with the cash flow demands of large purchase orders.
As the client does not pay until they have received the goods (and sometimes at least 30 days after this). Whether you are purchasing goods from the UK or abroad this form of finance allows you to accept the purchase orders that you need to.
The general process for trade finance is:
- You order the goods from your supplier and if there is a deposit due you will still cover this from your cash flow.
- Once the order is dispatched from the factory or wholesaler and shipping documents are received, the trade finance partner will on your behalf will pay the due amount
- On arrival in the UK (if applicable) VAT/Duty amounts owed are still due for payment by you.
- You pay the trade finance company back once your customer has settled their bill. If the customer will take a long time to pay, usually an invoice discounting facility would be linked to the trade facility to allow you to receive an advance of up to 80% on the invoice raised before final settlement.
This type of facility is widely available and if you can meet all of these steps and have the cash flow to fund the deposits, VAT/Duty amounts owed and any shipping costs incurred, along with having an advanced purchase order from your end recipient we can secure a very competitive rate for you:
- As low as 1.5% interest per month
- A facility allowing up to 150 days of credit
- No or very small securities required if your end customer is credit worthy
- Facilities as small as £50,000 available which can we used again and again
ALTERNATIVE TRADE FINANCE
With the evolution of retail and other industries, the traditional method of trade finance is working for less and less clients. We work with a large selection of companies who can offer variables within the basic core of trade finance to allow for these changes.
E-Commerce Trade Finance
We work with partners who can offer a more flexible facility allowing you to purchase goods for your inventory without final purchase orders from your customers. Many corporates do not now give you purchase orders in advance so this sort of facility is extremely helpful.
Retail Concession Purchasing
Supplying a lot of modern day corporates often requires a pay as you sell set up. We work with partners who are open to this, allowing you the flexibility to purchase the stock you need on more flexible terms.
Cash Flow Trade Finance
In the traditional method of trade finance, deposits, shipping and VAT/Duty fees are all still due to be paid by you. New products in the market allow for finance companies to now pay these on your behalf at the same interest rate agreed for the goods, to allow further flexibility and growth.
Trade Finance & Invoice Discounting Combination
Having a set up a trade finance and invoice discounting facility in conjunction with each other allows you a full credit line from purchase to settlement with no stress. Having the facilities within the same partner also makes the set up easier as setting these two lines up separately is very complicated due to the securities both companies would be wanting.