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Trade Finance Loan Providers

Pay your suppliers up front.

What is Trade Finance?

Trade finance is a form of working capital finance that helps businesses which buy and sell goods to finance the first part of the cycle; purchasing the goods.

It’s often used by importers but can also be used for businesses that are buying goods from UK based suppliers.  It is normally used where your supplier isn’t offering you credit terms and you are therefore required to pay for some or all of the goods upfront.

Under these circumstances, trade finance can be used to protect your cash flow by getting a trade finance loan company to purchase the goods on your behalf.

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How Does It Work?

A trade finance company will pay your supplier, effectively purchasing the goods on your behalf and you will repay them from the sale of those goods. Despite their involvement, you will still be responsible for the goods as you be if they weren’t involved. You will be required to service the interest monthly while the transaction remains open.

As repayment hinges on a sale to your customer, a potential lender will want to be certain that there’s a good level of demand for the product that you’re asking them to finance. The best way to do this is with a confirmed purchase order from your customer, however this isn’t always available and a proven sales history is just as good.

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Am I Eligible For Trade Finance?

Some of the key things lenders will look at are:

  • Who is the supplier?
  • What’s your trading history with them like?
  • Who is the customer and are they creditworthy?
  • What profit margin is in the deal?
  • What are the goods and who’s in possession of them during the transition?
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Key features

  • A trade finance company pays your supplier and purchases the goods on your behalf
  • Working capital finance that protects your cash flow
  • Only repay the lender once the goods have been sold
  • Monthly interest rates ranging from 1% to 4%
  • You retain control of and responsibility for the goods

How much does it cost?

The main costs with trade finance are the arrangement fee and the interest rate:

  • The arrangement fee is either a percentage of the facility limit or a fixed amount and is payable up front.
  • The interest rate is normally charged on a monthly basis and may be advertised as 2% per month, for example. Interest is payable monthly in arrears. The rate varies depending on a several factors but as a rule of thumb it’s generally between 1% and 4% per month.

The rate can appear expensive if you look at it over 12 months, however a trade finance transaction should never take that long to complete. Most trade cycles, from buying the goods from your supplier to selling them to your customer, are done in 90 days or under. The interest rate should be viewed in this context and on a transaction-by-transaction basis.

A trade finance company will want to make sure that there’s a sufficient gross profit margin in the deal to cover their fees i.e. the interest rate. Obviously this will depend on what the interest rate is and how long the transaction will be open for but as a guide you will need a minimum 20% gross profit margin.

What are the benefits?

There is nothing more frustrating for a business than having to turn away good orders because you don’t have the cash flow to finance them; with trade finance this needn’t be an issue as the trade finance company will purchase the goods on your behalf.

Not only can you forget about turning orders away but with the backing of a trade finance company you can take on larger orders than ever before and grow your business off the back of it, ultimately resulting in more profit for you.

Another benefit is if you’re dealing with a new supplier on the other side of the world, they might not have heard of your business which means they might be cagey when dealing with you, however if you have the backing of a reputable trade finance company who can provide assurances of payment then it can make negotiations much easier.

 

Trade Finance

Trade Finance

Funding to pay your suppliers for stock or release cash that’s tied up in stock you already own

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Invoice Finance

Invoice Finance

Boost your cash flow by releasing the cash that’s tied up in your outstanding invoices

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Business Loans

Business Loans

Loans can be used for a variety of reasons and the funds can be in your bank account in hours

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Bridging Finance

Bridging Finance

Fast and flexible property finance that can be arranged in a matter of days

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Commercial Mortgages

Commercial Mortgages

From purchasing your trading premises to refinancing your investment portfolio, commercial mortgages are used by SMEs and property investors alike

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Development Finance

Development Finance

Designed for experienced developers, this funding provides the backing to purchase land and build new properties

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What should I do next?

At Ping Finance, we have a professional team of experts in trade finance.

To discover how our services could help you secure a trade finance loan, please fill out the quick enquiry form by clicking “Let’s Talk” or contact us on 0330 058 2330. Our offices are based in Bolton, Greater Manchester.

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Want to talk to someone?

Give us a call on

0330 0582 330

Ground Floor,
Unit B,
Lostock Office Park,
Lynstock Way,
Lostock, Bolton,
BL6 4SG

Ping Finance is a trading name of Ping Finance Limited which is registered in England and Wales under Company Number is 10973327, whose registered address is Ground Floor, Unit B Lostock Office Park, Lynstock Way, Lostock, Bolton, England, BL6 4SG. Ping Finance Limited is also registered with the Information Commissioner under Registration Number ZA447449.