Quick answer
Trade finance pays your suppliers for stock up front, often overseas suppliers, and gives you time to receive, sell and collect payment before repaying. It suits importers, wholesalers and retailers whose cash is tied up in inventory. Non-bank trade finance providers consider businesses that banks find too small or too young.
Key points
- Pays suppliers up front, repaid as goods sell
- Suits importers, wholesalers and stock-heavy retailers
- Terms often matched to shipping and sales cycles
- Property security can back larger or riskier orders
The inventory trap
Importers and wholesalers often pay for goods months before they see a dollar from customers. Pay the supplier, wait for shipping, clear customs, warehouse, sell, then wait again for the customer to pay on terms. The bigger the order, the longer the money is locked up. Growth makes it worse, because every larger order needs more cash up front.
How trade finance unlocks it
- You place an order with your supplier.
- The provider pays the supplier on your behalf.
- Goods arrive and you sell them.
- You repay the provider from the sales, within an agreed period.
Choosing the right tool for stock
| Need | Better fit |
|---|---|
| Regular supplier orders | Trade finance facility |
| Customers paying you on long terms | Invoice finance |
| One large seasonal stock build | Short-term working capital loan |
| Big order, complicated credit | Property-secured loan from $20k up to $5m |
What makes an application strong
- A track record with the supplier.
- Evidence of demand: past sales, purchase orders or customer contracts.
- Healthy margins after freight, duty and fees.
- Clear stock turnover figures.
Watch the timing
The biggest risk is a delay: a ship held up, a customs query, a slow season. Build buffers into the timeline and know what happens if repayment is due before the stock sells. Mapping the cycle in the cash flow gap calculator helps.
An illustrative order cycle
Picture a homewares importer ordering a container of stock for the Christmas season. The supplier wants payment before the goods leave port. Shipping takes several weeks, customs and delivery to the warehouse add more, and the retailers who buy the stock pay on 30-day terms after delivery. From paying the supplier to collecting the cash can easily stretch past three months. Without funding, the importer either orders less than demand allows or drains the account that pays wages and rent.
A trade facility pays the supplier, the goods arrive, and repayment is timed to the point where customer payments are flowing again. The importer orders the full quantity, keeps operating cash intact and pays a known cost for the time the money was used.
Questions to ask any trade finance provider
- What share of the supplier invoice will you fund, and what do I pay up front?
- How long is each drawing allowed to run, and what happens if goods arrive late?
- Are there minimum monthly fees or volume commitments?
- Do you take security over the stock, the receivables or both?
- Can the facility grow as order sizes grow?
Clear answers to these let you compare providers on substance rather than marketing.
Talk through your next order
Use the 60-second form with the order size, supplier and expected sales timing. There is no credit check for a first chat, an expert looks it over, and nothing gets shared. Ask about trade finance.
Frequently asked questions
How long does trade finance last?
Usually long enough to cover shipping, customs clearance and the sales cycle, often a few months per order.
Can I use trade finance for local suppliers?
Yes. Many facilities fund domestic as well as international purchases.
What do providers check?
Your trading history, the supplier, the goods, your customers and how quickly stock turns over. Credit history is considered alongside these.
What if a shipment is delayed?
Talk to the provider early. Some facilities can extend; otherwise a short-term loan or line of credit can bridge the gap.
Prefer to start now? Enquire here
About 60 seconds. No credit check when you first enquire, and a person who handles unusual deals calls you back.