Changing seasons bring trade finance to the fore

As we watch the season change to Spring, the green shoots of growth are apparent.  The business sector is no different.  Spring is an important time in the trading calendar and for businesses ensuring they have done the groundwork to enable them to capitalise on the optimism that the season brings is crucial.  

We all know that setting up a business and watching it grow is a tough and challenging process that requires a lot of determination, effort, and patience.  But ensuring it is best positioned to maximise the opportunities as they arise can be the determining factor when seeking out success.

Spring brings a key trading window for many firms looking to purchase goods upfront to fulfil customer orders.  Whether products are being purchased from domestic or international markets, to cater for seasonal demand or in the normal course of business, the supply chain can be complex and take many months.  

The challenges facing business

The fallout from Brexit and the Pandemic led to a shortage of goods disrupting global supply chains presenting frustrating challenges to businesses.  These disruptions although vastly improved have not yet fully recovered and continue to elongate the supply chain cycle.

Having built solid customer demand for their products, businesses just want to fulfil orders and get paid.  Supply chain delays can disrupt the cycle and when sellers demand upfront payment before shipment there can be an increased strain on cashflow, and, in some cases, it can detrimentally affect the health of the business. 

From our experience working with businesses, we know that having a strategy in place, alongside the right partners, is crucial to growing a business. Finances are a crucial part of any strategy and ensuring they have the right funding in place cannot be underestimated.  Securing trade credit and the right funding solution are essential seeds to a successful trading cycle. Without them, the wheels of commerce would come to a screeching halt.

When seeking out finance, it can be difficult for some businesses to access the funding they need to support the financing of a long supply chain as they may not be able to supply the extra security often requested by traditional banks.  This is where Trade Finance could come into play.  

Unlock business opportunities with Trade Finance

Trade Finance is a funding solution used across the world and is a collective term for a range of funding solutions that enables trade to happen be that in the UK or internationally.  Trade finance companies can be essential partners in helping you obtain working capital to help your business grow.  Essentially it bridges the funding gap between the business buying the goods upfront and receiving payment from their customers once delivery has been made.  Trade Finance can help to smooth out the cash drain that businesses experience.

A valuable funding tool

Trade finance helps reduce trading risks especially if a firm is dealing with overseas suppliers.  It supports businesses through:

• improved buying power – suppliers are paid upfront ensuring the business can purchase the goods they need when they need them
• protecting cashflow – capital is retained to put to good use in the business.
• boosting confidence – Continue selling knowing customer orders will be fulfilled

• a flexible ongoing source of working capital – When used in conjunction with an Invoice Finance facility the business can receive an upfront payment of up to 90% of the value of outstanding invoices and up to 90% of each invoice raised with the level of funding growing in line with sales
• improved financial strength – allows negotiation on price for upfront or early payment discounts with suppliers boosting profitability

Pulse Cashflow – Supporting growth

Our Trade Finance solution could be the answer to your clients trading challenges.  We offer our Trade Finance solution in conjunction with one of our Invoice Finance products, to provide a comprehensive solution.  Together they provide the working capital needed and the flexibility of supplier payment options that enables businesses to trade more confidently and take advantage of the opportunities they come across. 

Our Trade Finance solution can be put in place to fund confirmed orders in as little as five days and can:

• provide up to £2m of funding available to purchase upfront stock 
• enable additional funding via an invoice finance facility from £250k - £5m
• deliver confidential facilities and selective facilities to meet your needs.

A wide range of businesses can benefit from Trade Finance.  We can help:

• Established businesses with one year of trading history.
• UK Businesses trading with other businesses on credit terms both overseas and in the UK.
• Limited companies projecting £1m up to £20m+ turnover.
• Firms requiring funding between £250k and £5m and looking to access a trade finance facility of up to £2m.

With a single monthly fee on average 2.0% - 3.5% of funds advanced per month it’s an attractive funding option.  The only other cost is a one-off arrangement fee but there are no minimum annual fees.

Choose your funder wisely

And finally, take time to choose the right funder. The key to successful growth is selecting the right funding provider.  One that understands the firms trading patterns and the amount of working capital they need as they expand their business.