Trade Finance

Finance for wholesale, distribution & importing/exporting goods.

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Business Finance Team

Benefits of Trade Finance

If you work in the trade of wholesaling, distributing, or importing goods, a trade finance facility may benefit your business. Trade finance works by allowing you to purchase stock or inventory to fulfil an order. Similarly to Invoice Finance, it will allow you to continue completing customer orders, without having to wait out lengthy payment terms on current owed credit.

A Trade Finance facility can be put in place to reduce payment gaps in your trade cycle. Waiting out lengthy payment terms can reduce the amount of sales you are able to make, therefore slowing your income. Trade Finance facilities also allow companies to process larger stock orders with their suppliers, due to bulk discounts. This drives higher sales, and will boost your cash flow. Managing your supply chain is vital for successful companies. A facility with a Trade Finance partner will decrease the time between payments processing within your business, therefore giving support to your supply chain.

Trade Finance has plenty of advantages. It can be used by those who run import/export companies, which other products aren’t available for. International trade is typically a red flag for lenders, although this form of business is accepted with most Trade Finance lending partners.

Importing and exporting goods across the globe is seen as a risk, so the high-street banks are unlikely to deal with such companies. With our consultancy service, we can find you a lending partner that will tailor a product to you, whether you run international trade deals, or trade within the UK. It can also sit alongside other financial solutions you currently use, such as business loans, and invoice finance.

Purchase Order Financing works by your lending partner advancing you an agreed prepayment precentage (usually between 30-70%) of your total order cost. These funds are used to purchase goods from your supplier, to then sell on and make profit.

Due to the import/export nature of the industry, E-Commerce Finance is also available. Similarly to Purchase Order Financing, this product works to forward credit to the eCommerce shop owner to purchase stock. This stock will then be sold on, and the lender will be paid back their loaned funds with an interest fee on top.

There are regulatory aspects to consider when applying for Trade Finance, such as the sales being finished goods is an absolute must.

Invoice Finance is another product that can help those within the International Trade, and Wholesale sectors. This form of financing is a cash flow and working capital solution that provides a line of funding in the form of forwarded payment. A prepayment percentage will be agreed, and will be forwarded to you. This is done to help you ensure payments are never missed to your suppliers, supporting your cash flow, allowing your deals to always run smoothly.

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Eligibility

Turnover

Unless you are a new start-up company, the minimum turnover most lenders will deal with is £250,000 turnover.

Trading History

Similarly to Turnover, start-up companies can get funding. Once you have filed accounts for the year, we can then apply you as a fully-fledged trading business.

UK Registered Businesses

Due to us dealing with UK Based Lenders, we can only find funding solutions for UK Limited Companies.

FAQs

How much will a Trade Finance facility cost?
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The cost of a Trade Finance facility will vary depending on the amount of money being borrowed, and the facility term. The interest rates are usually around 2%.

Am I eligible for a Trade Finance facility ?
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Eligibility varies largely from lender to lender, with some much more flexible, some much less. The basic criteria for applying for a Trade Finance facility is as follows:
- £250k minimum turnover
- UK Registered Limited Company
- Orders against completed/finished goods
If you don’t meet this criteria it isn’t the end of the road, other funding options are available, and this can be discussed with one of our consultants.

How long does it take to arrange a Trade Finance facility ?
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Trade Finance facilities can be completed in as short as a few days, although the process can take longer. This can be dependant on the way you conduct your business, such as whether you run international trade, such as import/export, or whether you wholesale within the UK. Our aim is always to make the process as quick, and simple as possible.

How much money can I get through a Trade Finance facility ?
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Trade Finance facilities can vary in amount, usually between £50,000 and £5 million. This can be arranged and tailored to perfectly suit your company.

Why use Spark Finance?
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We are not your average broker. We strive to find you the perfect funding facility for your business, in the easiest way possible. We designate a member of our team of specialist finance consultants to you, walking you through the entire process until the funds are in your hands.

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“Would thoroughly recommend using Spark Finance, we had great service all the way through the process from Perry. We will definitely be back should we need any more finance for my business”

Reviews from our clients

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Disclaimer: Spark Finance Ltd (Registered office - 18 John Stow House, London, England, EC3A 7JB, Registered Number 10128297) helps UK firms access business finance. Spark is a credit broker, not a lender. Any quotes provided are for information purposes only and subject to status and separate lender terms and conditions. Applicants must be aged 18 and over.  Guarantees and Indemnities may be required.  Spark Finance may receive commission from lenders  which may vary depending on the lender, product, or other permissible factors. The nature of any commission model will be confirmed to you before you proceed.

Spark Finance Ltd is authorised and regulated by the Financial Conduct Authority in the UK (FRN 958123).