Earlier payments also mitigate risk for suppliers. Trade and supply chain finance helps ease out cash constraints or liquidity gaps – for suppliers, customers, third parties, employees or providers.It allows a company to be more competitive. Trade finance can also help strengthen the relationship between buyers and sellers, increasing profit margins.Trade finance allows companies to request higher volumes of stock or place larger orders with suppliers, leading to economies of scale and bulk discounts.This could also have balance sheet advantages. It increases the revenue potential of a company, and earlier payments may allow for higher margins. Short to medium-term working capital, using the underlying products or services being imported/exported as security/collateral.It is beneficial for supply chain relationships and growth. Why does this help? A trade finance facility may allow you to offer more competitive terms to both suppliers and customers, by reducing payment gaps in your trade cycle. Trade finance is a tool which is used to unlock capital from a company’s existing stock or receivables or add further finance facilities based on a company’s trade cycles.

Managing cashflow and working capital is critical to the success of any business, which means reducing Days Payable Outstanding (DPO) or Days Sale Outstanding (DSO). Trade finance helps businesses grow by guaranteeing or providing finance to help them to buy goods and stock, which is often necessary when they don’t know or trust other parties in the supply chain. How can trade finance benefit my business? *World Bank Data, USD trade in goods and services volumes, 2021 In order to address some of the common issues and misunderstandings around trade finance, we have put together this extensive guide. The terms import finance and export finance are also used interchangeably with trade finance. Supply Chain Finance (also known as Payables Finance).Invoice and Receivables Finance (Discounting & Factoring).‘Trade finance’ is an umbrella term, which includes a variety of financial instruments that can be used by businesses that import or export. Trade finance accounts for around 3% of global trade, worth some $22.3tn USD of exports annually*. Lenders include banks, non-banks and insurers, who use a variety of methods and products to help businesses finance their domestic and international trade flows. Trade Finance is the financing of goods or services in a trade or transaction, from a supplier through to the end buyer.

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