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.