Trade finance provides security and flexibility for businesses trading internationally — particularly when working with new customers or unfamiliar markets.

For exporters, a letter of credit confirmed by a reputable bank in the buyer’s country ensures payment will be received, even if the buyer defaults. For importers, documentary letters of credit offer assurance that goods will be correctly packed, certified, and inspected by a third party before shipment.

Additional trade finance options include pre-shipment finance, working capital loans, overdrafts, and receivables finance. Sellers may also use instruments such as bills of exchange or standby letters of credit to secure payment, which can be confirmed or negotiated through their bank.

Some businesses adopt an integrated approach — using a letter of credit to import goods (secured against property), transitioning to a stock loan while goods are held, and then using invoice finance to release working capital while awaiting customer payments.

Due to the wide range of structures and scenarios, trade finance is typically arranged and priced on a bespoke basis.

If you would like to know more about trade finance, let us know here.