Trade and Supply Chain Finance

What is Trade and Supply Chain Finance?

Trade and Supply Chain Finance provides flexible funding options to support the purchase, movement, and sale of goods - whether or not you have a confirmed buyer or purchase order. These solutions help businesses bridge cash flow gaps, pay suppliers promptly, and manage the financial risks of domestic and international trade.

• Trade Finance supports transactions based on a confirmed purchase order, helping fund the purchase of goods with guaranteed supplier payment.

• Supply Chain Finance (SCF) allows you to bring in stock or materials without a confirmed buyer, using your historical sales data and supplier terms as the foundation.

How it Works

Trade Finance Process:

1. You receive a purchase order and apply for funding with supporting documents.
2. The lender assesses the order, and once approved pays your supplier directly.
3. You deliver the goods, receive payment from your customer, and repay the lender (often with Invoice Finance on the back end).

Trade Finance Example:

A UK manufacturer secures a £500,000 trade loan to fulfill a major retailer's purchase order. The lender pays the overseas supplier upfront. Once the goods are delivered and the debtor payment is received via invoice finance, the manufacturer repays the facility - maintaining smooth cash flow throughout.

Supply Chain Finance Process:

1. You apply for SCF based on business performance and supplier relationships.
2. The lender pays your supplier early (often at a discount).
3. You receive the goods and sell them.
4. You repay the lender within an agreed term (typically 30–120 days).

Supply Chain Finance Example:

An electronics distributor uses SCF to import headphones. They don't have an order, but they know that they can sell the majority of the batch within 90 days based on previous sales history. Even without confirmed orders, the supplier is paid early by the lender, and the distributor repays the finance after selling the goods - without tying up working capital.

Is it Right for My Business?

Trade and Supply Chain Finance is suitable for businesses that:
✔ Face cash flow gaps between buying and selling goods
✔ Import goods or components regularly
✔ Want to extend payment terms with suppliers
✔ Need to fund growth or larger orders without additional collateral
✔ Engage in international trade and want to reduce payment risk
✔ Want to take advantage of bulk purchasing discounts

Application Requirements

• Recent financial accounts and bank statements
• Purchase orders or proof of regular stock turnover
• Supplier and customer details (including contracts and trading history)
• Shipping and quality control documentation
• Director and business background information

Lenders assess the creditworthiness of your business, the buyer, and the supplier involved in the transaction.