Trade Finance

Trade finance is becoming an increasingly popular method of finance.

Under the general term of trade finance the two most popular types are Purchase Finance and Letters of Credit.

Both types of trade finance can be used by themselves or they can very often  work with other forms of finance such as invoice finance or existing bank facilities.

Purchase Finance is basically a short term funding solution against a specific order. It is well suited to businesses who are either importers or UK traders looking to source and supply those goods within a short timescale, e.g. you have a firm order from your customer to supply a machine which you will have to import from France, your customer won't pay you until they have received delivery however you have to pay the French supplier. The trade financier will look at the strength of the order and decide to fund the purchase.

Letters Of Credit are used between the importer (you) and the exporter whereby the letter of credit guarantees that the exporter will be paid by a major bank providing that the exporter can provide documents required under the letter of credit. You (the importer) will not have to pay until the documents have been presented.

Trade Finance can sound very complicated however it is often very beneficial to those who use it. If you wish to discover if you can benefit from trade finance, please complete our enquiry form or telephone us on 01554 742724 and we'll get one of our specialists to contact you.