About Trade Finance

Trade or Transaction Finance is "through finance" from supplier through the client to customers who require goods or services. It is "off-balance-sheet" finance, which does not affect existing bank facilities. The normal simple scenario is that the Finance Company buys and sells to the client. Upon sale of the product the sales invoice is assigned to the Finance Company and, from proceeds, they recover their position and pay the profit to the client.

The prime consideration for the Finance Company is always to know how they are going to get their money back. When they know that, they can buy goods or services for the client that they cannot finance for themselves. Other than that they have few rules.

Such finance is used for imports, exports, goods both bought and sold in UK (frequently after manufacture), and even if the goods never touch the UK or Ireland.

The most frequent method of purchase is on "open account" using a Supplier Undertaking (SU), either from UK or overseas. This is much more economical for the client than the use of Letters of Credit, but it is also much more secure for all parties, including even the supplier. This is often used by manufacturers with UK or EU suppliers who are factoring their debts with an established factor, from which the Finance Company can recover their position.

Stock Finance is also available against confirmed orders.

The Benefits of Trade Finance

• ‘Through finance’ – an end-to-end solution
• ‘off-balance sheet finance’ – does not affect existing bank facilities
• Simple lending criteria
• Finance Company can work with UK factoring companies

Interested in Trade Finance Options?

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Alternatively call us free on 0800 781 3414 to speak to one of our team.

Interested in Stock Finance? – Contact Us