What is Trade Finance

What is Trade Finance?

The smart way to facilitate international trade

Trade Finance is a way of funding the purchase of finished goods from overseas suppliers for resale either here in the UK or for onward export. It is an alternative to import loans, credit cards and overdrafts as it bridges the cashflow gap between paying suppliers and receiving payment from customers. When used in conjunction with invoice finance it can considerably shrink the cash flow gap and help maintain the level of working capital you hold for other investment.

More experienced users of Trade Finance are able to negotiate the best terms with any supplier much more easily because they have the right funding partner - giving them the confidence to be able to fulfill not only existing orders, but go out and chase new ones. For your business, Trade Finance will open doors to new opportunities.

DOWNLOAD | Importing to Develop Your Business

Trade Finance explained

If you are, or are planning to, import goods from around the world; whether its from Europe, USA, China or Australia - trade finance can help free up the cash tied up in a transaction.

We have put together this short video to show you how trade finance works. Watch our jargon-free explanation and see how it can help your business.


Open More Doors

Open more doors and close more deals

Discover new trading opportunities

Some of the complexities of trading with overseas suppliers, along with a full example of the process, stages and cost of using Trade Finance are explained in our simple guide 'Open More Doors and Close More Deals'. It also shows how you can add Invoice Finance to your Trade Finance facility so you can shorten your cash flow gap from paying your supplier to being paid by your customer.

DOWNLOAD | Open More Doors To Close More Deals

Can Trade Finance help my business

Can Trade Finance help my business?

If you import, or are thinking about importing

By securing the funds you need to purchase stock, you can remove on of the day-to-day pressures of dealing with suppliers, especially those overseas. Using Trade Finance will allow you to negotiate better prices, buy the stock you need and have it shipped faster than your competitors. Trade finance is beneficial if you:

  • are a UK business that trades with businesses both overseas,
  • have strong management process and systems,
  • find it difficult to satisfy existing customer orders and to accept new ones,
  • have a credit limit restricting your ability to grow your business.

As one of the leading UK import finance providers we have signed up to The SME Finance Charter. We’re committed, as a responsible funder, to support UK businesses prepare for Brexit and beyond by helping to access the funding needed for international trade.

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Trade Finance key facts

Key features of Trade Finance for importing goods and the benefits you get working with the UK's leading alternative business finance provider. Bibby Financial Services has been helping businesses trade with suppliers from all over the world for over 30 years.

FEATURE

  • Access to international trade funding up to £10m.
  • We can supply a Letter of Credit or Supplier Undertaking.
  • Pre-Shipment payment; either by deposit or full pre-payment.
  • Post-Shipment payment on receipt of shipping documentation.
  • Duty, VAT and Freight can be paid the same day your goods arrive.
  • Pay suppliers in over 65 currencies.
  • Access to our international network of offices.
  • Optional Invoice FinanceBad Debt Protection and Foreign Exchange services.

BENEFIT

  • Confidence: know that you can negotiate, buy and pay for goods.
  • Guarantee: give your suppliers reassurance they will be paid.
  • Flexibility: negotiate a deposit or full pre-payment for the best deal. 
  • Speed: for ex-stock products, payment when goods are shipped.
  • Support: working with you to get your product to market - fast.
  • Efficient: pay in the preferred currency of your supplier.
  • Presence: true global support in Europe, North America and Asia.
  • Personal: we get to know your business to ensure we get exactly what your business needs. See our Service Promise for details.

Office People 14

Import confidently with minimum financial exposure

Protect your cashflow and working capital

  • We fund you if you have a customer PO or can show robust sales forecasts for the goods you are importing.
  • Pre-Shipment payment - we can fund using a Letter of Credit or Supplier Undertaking, a part-payment deposit or full (100% up-front) payment.
  • Post-Shipment payment - we will pay your supplier once your order has been shipped.
  • Invoice Finance - reduce your cash flow gap even further by including Invoice Factoring or Invoice Discounting.
  • Other services - Our competitive Foreign Exchange allows you to pay in over 60 currencies. Ask about our Bad Debt Protection to secure against non-payment by customers.

In 2019 alone we delivered over £449 million of funding to UK importers. Gary Griffiths, Managing Director, Trade Finance

Supply chains after Covid-19 Q&A

A half-hour Q&A with BFS and the Institute of Export & International Trade focusing on how supply chains have been affected by the Covid-19 pandemic and how they may change in the future.

In this session we cover; Impact of the virus on international shipping - Whether Covid-19 could lead to the reshoring or diversification of supply chains - How trade finance can support companies to manage their trade cycles - Other factors that could disrupt supply chains in the months ahead.