Trade Finance

Trade Finance

What is Trade Finance?

Trade finance is a term often used by the finance industry to describe a number of different activities, however, in its simplest form , trade finance is most commonly used explain a funding process where a supplier requires a purchaser to prepay for goods shipped.

A trade loan is ideally for businesses who:

  • Have a large inventory holding compared to turnover
  • Run a large overdraft purely because of long inventory hold times
  • Deal with debtors who pay on long terms i.e. 60 or 90 days.
  • Deal with suppliers who require upfront payments or offer large early payment discounts to debtors.

How trade finance works:  

how-trade-finance-works

A trade loan captures the entirety of the a business cash conversion cycle, that is – the ordering process, the holding period  and the debtor collection days.

Why not give us a call on 1300 930 106 to talk to us about your options. Alternatively, you can find more information here

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