Many businesses, providing a range of services, in a range of industries, do run into financial issues with suppliers. Here at All Star Funding Solutions we know what a headache it can be, when your supplier demands payment upfront. But don’t worry, our professional team is here to help.
Trade finance, or purchase order finance as it is occasionally known, is a great way to navigate this issue, if or when it occurs.
What is Trade Finance?
Trade finance refers to the financial products and services that support the buying and selling of goods and services in international trade. The main purpose of trade finance is to manage the risk and provide financing for companies involved in international trade.
Trade finance services can include:
- Letters of Credit: A letter of credit is a guarantee from a bank that the seller will receive payment if they meet specified conditions, such as shipping goods within a certain timeframe and providing proper documentation.
- Factoring: Factoring is a financing option where a company sells its accounts receivable at a discounted price to a third party, known as a factor, in order to obtain immediate funding.
- Export financing: Export financing provides financing to companies selling goods or services overseas, allowing them to cover the costs of production, shipping, and other expenses until payment is received from the buyer.
- Import financing: Import financing provides financing to companies importing goods or services from overseas, allowing them to cover the costs of the purchase and shipping until payment is received from the buyer.
- Documentary collections: Documentary collections are a secure way for a seller to receive payment for goods or services exported overseas. The seller sends the documents required for the shipment to their bank, which forwards them to the buyer’s bank for payment.
Trade finance helps companies manage the risks involved in international trade, such as currency fluctuations, payment defaults, and shipment delays. It also provides financing for companies to cover the costs of production and shipping, allowing them to grow their international trade.
Trade finance is a crucial tool for companies involved in international trade, helping them manage risk and provide financing to support their growth and success.
Why Trade Finance?
In simple terms, Trade Finance is when a seller requires a buyer to prepay for goods in advance. This can include sales within the UK or abroad.
- Quick approval
- The ability to fund your stock requirements
- Offers a flexible repayment of up to 90 day terms
- Fund up to 90% of invoice
- Facility available in multiple currencies
- Improve your purchasing power with suppliers.
- Increase your credibility to trade with overseas suppliers.
- It offers you a range of payment options including : Letters of Credit, Documentary Collections and Telegraphic Transfers.
The benefits explained.
All things considered if you have the opportunity to purchase finished goods for onward sale our panel of lenders can help. Our lenders are able to fund the goods on your behalf and get the goods into your premises. We are able to arrange a facility that gives you funding up to the point your customers have paid you
A revolving line of credit is set up which can be used to pay international and domestic suppliers, in any currency.
Our lenders will pay your supplier directly, then the goods are shipped to your designated address. The lenders facility then provides you with 30, 60 or 90 days credit.
Application – Four Easy Steps
- Firstly – Application submitted,
- Secondly – Quick approval,
- Thirdly Goods shipped, payment then made to supplier,
- Fourthly Client repays within agreed term,
How does it work? Three easy steps
- Firstly obtain a purchase order from your customers and place your own order with your overseas supplier
- Secondly the lender will pay your supplier. The goods can then be provided.
- Thirdly your customer places an order and your supplier asks for the costs upfront. You can apply for trade financing to cover the costs to your supplier. When your customer pays for your services or product, you can keep the profit, and pay back your balance with the trade financier.
Here at All Star Funding Solutions, we make it our business to source the best deals for our clients. We have a vast amount of contacts with various financial firms and lenders. With this level of support we can find the best business options for you.
We will take a look through your individual and unique finances to establish the most suitable lenders for you. We can then negotiate with the lenders to get best and most effective deal. Why not get in touch today?
If you would like to speak with one of our specialists please call 0161 8211478
If your business requires funding then we can help you find the solution.
A Trade Finance loan is a type of financing that is specifically designed to support international trade transactions. Trade Finance loans provide short-term funding to businesses engaged in global commerce, allowing them to manage cash flow, purchase inventory, and fulfill orders.
Letters of Credit (LCs): Letters of credit are a type of financial guarantee that ensures payment to the exporter in the event that the importer is unable or unwilling to pay.
Documentary Collections: Documentary collections are a type of trade finance that involves the use of banks to facilitate the exchange of shipping and payment documents between the importer and the exporter.
Trade Credit Insurance: Trade credit insurance is a type of insurance that protects an exporter from the risk of non-payment by the importer.
Supply Chain Finance: Supply chain finance involves the use of financial instruments to optimize the flow of funds throughout the supply chain.
Trade finance refers to the financial instruments and products that facilitate international trade transactions. The primary role of trade finance is to mitigate the risks associated with importing and exporting goods and services across international borders.
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