International trading can be a great opportunity to grow your business. It can open the door to new customer bases, as well as new products and equipment for your business.
However, businesses looking to expand internationally can often face cash flow challenges. Overseas suppliers often require payment for goods and equipment as soon as possible. Whereas customers tend to take full advantage of credit terms when settling. This creates a gap between when stock is purchased and when cash is received from customer sales. The longer the gap, the more working capital your business will have tied up.
These factors can be a barrier for many businesses considering the international market. Trade finance helps offer a solution by bridging this gap for businesses.
What is trade finance?
Trade finance is a facility that helps businesses stay on top of their cash flow when trading. It works by borrowing a short-term trade loan for a specific import or export transaction. Loan terms are flexible and can range between 7 – 180 days. At Suitable Loans we can assist you with trade finance solutions for your business needs.
What can trade finance do for your business?
Import trade finance can assist your business to purchase goods from international suppliers. When you place an order, your lender will provide you with finance to pay the invoice amount. Once the goods are used or sold, the cash received from customers can repay the finance. Import finance reduces the gap between ordering goods and receiving cash from orders. This can help improve your business’ cash flow. It can also increase your purchasing power with suppliers and help you take advantage of bulk discounts.
Export trade finance can assist your business to sell goods to overseas customers. When you receive an order, your lender will provide you with finance to manufacture the order. Once the customer has paid, the finance is then repaid. Export finance can be a great way to help expand your business, without tying up your working capital. It may also allow your business to offer better credit terms to customers. This can help grow your business’ international customer base.
Talk to a Suitable Loans Commercial Finance broker.