How Can Trade Finance Benefit Your Business?

Regardless of the size of your business, whether you are a small-and-medium business or a multinational company doing export and import, trade finance plays an integral role. It is more favourable than getting an overdraft on your bank account and facilitating the trading process between the parties – buyer and seller or the importer and exporter. SUISSE BANK PLC is a reputable offshore banking institution that provides a wide range of trade finance products, , catering to the needs of global clients.  

Let’s understand how trade finance can help your business perform trade and scale.

Secure Capital to Purchase Goods or Stocks

For buyers or importers, trade financing can be an effective tool to secure working capital to purchase goods or stocks. It offers more scalable, secure or flexible cash flow solutions to help meet their growing business demands. In a scenario where SMEs face the challenge of high-cost barriers, trade financing gives them the option to order more goods which can increase their productivity considerably.

Guaranteed Payment to the Seller or Exporter

In most cases, importers want to make the payment after they receive the goods. However, this can be a risky affair if the exporter is dealing with new buyers or SMEs who typically run with limited working capital. In such cases, the exporters would want to receive the payments before shipping the merchandise.

Trade financing helps bridge this gap by ensuring guaranteed payment to the seller or exporter. This aids in better trading terms.

Address Short-Term Cashflow Challenges

In most cases, exporters maintain a long working capital cycle. Furthermore, there are waiting times of up to 90 days between the receipt of payment and the arrival of the merchandise. This long gap often forces importers to limit their orders within a particular time.

Trade financing helps address this problem by issuing payments to the supplier within days and not months. Hence, you can increase your trading flow and scale your business.

Conclusion

Trade financing helps bridge the payment gap between the importer and exporter, facilitating effective trading for both parties. For an exporter, it can help mitigate the payment risks while for the importer, it can reduce the supply risks from the exporter. Make sure you work with a reliable banking institution like SUISSE BANK PLC to have access to a wide range of trade financing products.