Trade finance is your trade management solution.
Do you have domestic or international orders to fulfill?
Do you need to manage international risk?
Are required to pay upfront deposits when placing orders?
Do you need bargaining power with your suppliers?
Or maybe, like most of us, you just need working capital to help your business grow...
If you are an importer, exporter, distributor or wholesaler and answered YES to at least one of these questions, then trade finance may be a finance solution for you.
Trade Finance is ideal for any business wanting to access money tied up in their stock and can help businesses and traders:
· Reduce risk when required to make deposit payments to suppliers
· Finance the pre-shipment cost from order to arrival
· Provide finance to cover the cash flow gaps between when you pay your suppliers and when you ultimately get paid by your customers
· Ability to offer extended payment terms to your customers,
· Even receive an invoice discount from suppliers for payment on order.
· Risk solutions are also on offer to manage payment, delivery, performance and Foreign Exchange risks.
The benefits are endless.
So, how does trade finance work?
Put simply, trade finance assists in business-to-business transactions.
Let me give you an example of how Trade Finance can help:
Let’s say you are an importer and you are required to make a payment, (whether deposit or full), to your supplier upon order of your goods, you then need to wait for deliver possibly value add to the goods before they can be sent to your customer who then has trading terms. This trade cycle could mean you have paid for the goods months before you are paid by your customer. This is where Trade Finance can assist, with finance being available from 30 – 180 days. And given the finance is considered self-liquidating you will see the cash flows of the business improve.
In some cases a finance limit can be set, simply based on relationship between your Cost of Goods Sold and stock turnover. A trade finance limit is specific to your business, terms and goods being supplied.
Why use trade finance?
Trade finance is all about managing your trade activities. Actual funding can cover more than just a single trade. There are a few ways in which your lender can help with trade finance, such as assisting with letters of credit, devising risk management solutions, document collection, and export finance.
Trade finance provides your business with enhanced cash flow allowing you to take advantage of the following:
- Providing working capital to fund business growth
- Unlocks cash within the business to invest in other areas of the business
- Accessing early settlement discounts from suppliers; enhancing business reputation
- Maximising opportunities available to your business
- Funding gaps between ordering and receiving stock
- Purchasing more stock for seasonal growth
…Or simply just taking care of business.
How Can TMFG help?
TMFG offers specialist advice and expertise with cash flow solutions tailored for businesses just like yours. With our guidance and advice, we introduce you to a lender that’s right for your business and we work with you find a solution to your Trade Finance Needs with a blend of products and services to manage your risks as well.
TMFG have assisted numerous business with trade finance solutions; Wholesalers, Importers/Exporters and Manufacturers, you could be next! Call us today to discuss your options.
Unlock your financial tomorrow, today with TM Finance Group