Trade & Supply Chain Finance

Fund Large Orders, Manage Inventory, And Support International Trade

Trade and supply chain finance provides funding specifically designed for businesses that need to fulfil large orders, manage international trade transactions, or maintain inventory levels without tying up working capital. By using goods, inventory, or trade documents as security, businesses can access competitive finance that traditional lenders may not offer.

Types Of Trade & Supply Chain Finance

Letters of Credit

A bank-guaranteed payment mechanism for international trade, ensuring suppliers are paid while giving buyers time to arrange payment. Essential for high-value cross-border transactions.

Inventory Finance

Borrow against stock value to maintain inventory levels without exhausting working capital. Ideal for seasonal businesses or those with high-value stock requirements.

Supply Chain Finance

A programme where buyers extend payment terms while suppliers receive early payment, funded through a financial intermediary and improving cash flow for both parties.

Common Use Cases

International Trade

Fund imports and exports with specialist trade finance products that manage currency and delivery risk.

Large Orders

Fulfil major customer orders without straining your cash flow through structured trade finance.

Inventory Management

Maintain optimal stock levels without the working capital burden through inventory finance.

Supplier Early Payment

Support your supply chain by offering suppliers early payment while extending your own terms.

Currency Risk Management

Mitigate foreign exchange risk in cross-border transactions with hedged trade finance solutions.

Frequently Asked Questions

What is a letter of credit and how does it work?

A letter of credit is a bank-issued payment guarantee used in international trade. The buyer's bank guarantees payment to the seller upon presentation of specified documents (such as shipping documents) meeting the agreed terms. This allows sellers to receive payment while buyers receive goods, with both parties protected against non-performance.

Can I finance inventory I already hold?

Yes, inventory finance can be arranged against stock you already hold, provided it has identifiable value and meets the lender's criteria. Lenders will assess the nature, quality, and liquidity of your existing inventory. Perishable goods or items with limited resale value may be more difficult to finance.

How does supply chain finance benefit both buyers and suppliers?

Supply chain finance benefits both parties: buyers can extend their payment terms (improving working capital) while suppliers receive early payment (improving their cash flow). The financing is provided by a third-party lender, with the buyer's creditworthiness used to secure competitive rates — making it attractive to both sides of the transaction.

Is trade finance only for international transactions?

No, trade finance is available for both domestic and international transactions. Domestic trade finance covers UK-based transactions with similar products like invoice finance and inventory finance. International trade finance typically involves additional complexity such as currency risk, documentary credits, and shipping documentation.

How quickly can trade finance be set up?

Trade finance facilities can often be established within 2-4 weeks for straightforward domestic transactions. More complex international facilities involving letters of credit may take longer due to bank documentation and compliance requirements. Existing clients with established facilities can typically access funds within days.

What documents are required for trade finance?

Required documents vary by facility type but typically include audited accounts, sales ledger reports, evidence of customer contracts or orders, and details of the goods or inventory being financed. For international trade, shipping documents, certificates of origin, and commercial invoices are also required. Your broker will provide a specific checklist based on your facility requirements.

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