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Understanding Trade Finance

What is trade finance?

Trade finance represents the financial solutions which businesses use to facilitate their international trade.  It includes someone who is importing goods from abroad to enable them to grow their business. For example, a construction business may need to import specialised materials which are currently unavailable in the UK. It also includes an exporter who is looking to provide their products overseas.  

What are the benefits of trade finance?

Trade finance offers the ability to trade safely. All parties are protected. I.e. it is about more than just finance. It is protection of everyone’s interest and the reduction of risk of trading internationally so that each party’s needs are met. By providing protection trade finance promotes the growth of international trade. 

Trade finance also helps businesses plan and manage their cashflow more effectively by cutting down the delays in payments and in shipments. 

How does trade finance work?

The way trade finance works is by introducing a financial solution from a third party which removes the risk involved with supplying and paying for goods. The buyer’s bank guarantees payment, and the importer knows that goods will be shipped. 

How does trade finance differ to conventional finance?

Conventional financing manages cashflow and liquidity, whilst trade finance works to protect against the variables involved in international trade. These can include foreign exchange (currency) risk,  economic and political risk, and problems with receiving payment.

Can you provide me with finance for overseas suppliers?

At Wharf Financial Services our brokers have experience in trade finance which can help you buy supplies and export goods faster by improving your cashflow. We can help you deal with the diverse situations which may arise when trading overseas. We facilitate pre and post shipment finance so that you can negotiate competitive terms with your suppliers, enabling you to achieve positive cashflow and concentrate on growing your business. 

Is trade finance expensive?

No, it is low cost. Please speak with us to discuss your individual requirements.

How much would you facilitate lending?

At Wharf Financial Services our brokers are experienced ex commercial bankers who have long term relationships with a variety of lenders. Please speak with us to discuss your individual requirements.