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Definition of trade finance

“Trade finance refers to financial arrangements that bridge the funding gap between being paid by customers and paying suppliers and includes such activities as lending, issuing letters of credit, factoring, export credit and insurance. Trade finance can facilitate both domestic trade and international imports and exports.” 

If you frequently come up against a funding gap between paying suppliers and receiving payment from customers, trade finance could be the solution you need to keep your transactions running smoothly.

Whether most of your trade takes place here in the UK or overseas, our lenders can provide the facilities to forge strong supplier relationships and allow you to exploit opportunities while minimising your risk.

What type of trade finance can we offer?

Depending on your industry, and whether you’re primarily trading in the UK or abroad,  the type of financial support you need will probably vary. At Access Commercial Finance, we like to get to know your business, and its typical trading cycle so we can arrange a package that will really help to alleviate some of your financial pressure.

Letters of credit

Letters of credit are basically a guarantee from a finance provider, like ourselves, that a particular seller will receive payment. Letters of credit can strengthen your trade relationships by guaranteeing your transactions, so you can offer better credit terms to clients and negotiate improved agreements with your suppliers. In the post-recession era, suppliers are often cautious about establishing credit terms, so this facility can help to cement trust in your trade, so you can speed up your transactions. Read our detailed section on Letters of Credit.

Import Export finance

Import Export finance usually involves a third party finance company to fill the gap between receiving goods and sending payment for importers and exporters. Trading internationally brings its own challenges and expenses, from credit assessment to foreign currency payments, but in the era of globalisation it’s more important than ever to be able to strike up strong trade alliances overseas. At Access Commercial Finance, we have the expertise to find you an Import Export Finance package that can make your importing and exporting run smoothly, whether you’re importing toys from China, exporting turbines to Africa or anything in-between.

Supply chain finance

Supply chain finance lets you sell your invoices to us, as soon as they are approved by your buyers, freeing up cash flow. Sometimes it’s impossible to predict how fast your orders will come in, and what other opportunities will fall in your path, especially for ambitious businesses with fast-growth in their sights. If you have orders to fulfil but are facing a short-term funding gap, we can provide finance solutions to bolster your supply chain and keep it moving as quickly as you need it to. Read our detailed section on Supply Chain Finance.

Contract finance

Contract finance is a short-term loan that can provide working capital to fulfil an export contract. If you are lacking the cash to fulfil the orders, and you don’t have assets to secure finance against. The lender may be able to offset a short-term cash boost against a specific contract or purchase order to help your business spread its wings overseas. Find out more about contract finance

Bank Guarantee

A bank guarantee is almost like a form of insurance, which will strengthen your credibility with suppliers. The lender can guarantee your payments so that in the event that you are unable to fulfil a contract, your suppliers will not be left out of pocket.

Factoring

Factoring is a way of releasing capital from your invoices the instant they are issued by selling them on. Trade factoring can release short-term capital because we will issue up to 90% of an invoice’s value as soon as we receive a copy.

Trade finance covers a wide range of solutions that will help you trade more effectively, wherever in the world your suppliers and customers are based.

Who is trade finance for?

Trade finance can help any fast-paced business that relies on strong supplier relationships, such as distributors, clothing manufacturers or retailers and exporters. Some of the solutions we have provided include:

  • Trade finance for a character merchandise distributor
  • Letters of credit for a retailer
  • Supply chain for a food manufacturer.

Call us today on 03330 069 141 to find see if we can provide the extra layer of protection you need, to forge your trade links with confidence.

Contact us today to find out if we can provide the cash injection that you need to put your ambitions into practice.

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