Are You Aware of the Importance of Trade Finance?

Roughly 80% of the global trade functions on trade financing. You may be missing out an opportunity today! Log into our webinar session today and find the perfect opportunity to take your business to new heights!

Any business, especially export businesses, needs constant financial support. The challenge lies in access to funding. Exporters keep a wary eye on risks associated with current capital tied up to goods that are headed overseas.

And, with limited access to loans and interim finances, traditional funding institutions may not want to risk offering loans or overdraft facilities for such transactions. 

When exporters can't always afford to wait until their exported products reach their destination before receiving payment, trade financing offers the ideal support. But what exactly is trade finance?

Trade finance is the general term for financial instruments and products used by business to facilitate global trading and commerce. Specifically, it provides exporters of any size, with funding without tying up their working capital. 

So how does trade financing work for you?

Invest in Your Business Growth

Traditionally, a business would need to give investors equity or control over assets in return for financial support. This means either a business will have to tie up assets or accept limitations on their business until the borrowed funds are repaid.

Trade finance, on the other hand, offers funding without collateral obligations. It also offers freedom from restrictions of equity, associated with conventional loans. As a business exporter, you can capitalise on opportunities in the existing market, without affecting your cash flow. This allows you to gain greater profit from potential investments while diverting crucial funding to business's growth.

Support Your Business's Custom Needs

Traditional funding would finance generic aspects of a business on the overall, but not it's specific needs. This would mean taking on additional and unnecessary funding, with the responsibility of timely repayments and the risk of defaulting on penalties. Trade finance provides financing solutions for selected aspects of a business's needs such as suppliers, processing, transportation, logistics and regulatory stakeholders independently. This allows you to focus on specific aspects of business that require crucial funding, instead of taking on overall general debt.  

Secure Funding from Pipeline to Profit

Export businesses that face lengthy trade cycles often experience delays in cash flow often hampering the start of new projects or future deals. The beauty of using trade finance is that it allows an exporter to fund specific opportunities or transactions, as opposed to waiting for sufficient cash flow to pursue them. When a business is sending multiple consignments abroad simultaneously the alternative to working with a trade finance provider would be to turn down orders from willing customers or to hand over a share in the business to someone with ready cash.

While these are a few advantages of trade finance, you also need to be aware of the risks of trade finance. Are you interested to know more? Sign up for our webinar as our experts provide an in-depth analysis of the importance of trade finance and how it can help expand your business for a better tomorrow.