Trade finance pays your suppliers now and gives you up to 150 days to repay — bridging the gap between buying goods and being paid for them. It is a revolving facility, so once you repay you can draw again, and it is available from £10,000 to £3 million.
We arrange trade facilities for UK importers, wholesalers, distributors and manufacturers — either standalone or alongside invoice finance. We are an independent commercial finance broker with access to over 100 lenders, and we charge you no broker fee.
Apply now or call 0161 546 9128.
How Trade Finance Works
The problem trade finance solves is a timing problem. Your supplier wants paying before or on shipment. Your customer pays you 30, 60 or 90 days after you deliver. In between, the cash is yours to find — and the bigger the order, the bigger the hole.
A trade facility fills it. In outline:
- You receive a confirmed order from your customer, or place an order with your supplier against known demand
- The lender pays your supplier directly, in their currency if needed
- The goods ship, arrive, and you sell them on
- You repay the facility from the sale proceeds, within the agreed term
- The limit is available to use again
Because the lender pays the supplier rather than handing you cash, trade finance is usually assessed on the strength of the transaction as much as the balance sheet. A business with thin accounts but a solid order from a creditworthy customer is a more fundable proposition here than it would be for an unsecured loan.
Features Of Trade Finance
- Revolving trade finance credit facilities
- £10,000 to £3m
- Pay suppliers directly
- UK and overseas imports
- Standalone without invoice finance
- Up to 150 days repayment
- Multi-currency payments available
Used well, a trade facility does more than plug a gap. It lets you negotiate better prices for larger orders, take early-settlement discounts from suppliers, and say yes to contracts you would otherwise have to turn down on cash flow grounds.
Trade Finance Example
A UK wholesaler wins a £180,000 order from a national retailer, payable 60 days after delivery. The stock costs £120,000 from a supplier in Asia who wants payment before shipping.
- Facility limit agreed: £150,000
- Lender pays the supplier: £120,000
- Shipping and clearance: around 5 weeks
- Retailer pays 60 days after delivery
- Total cycle: roughly 120 days, within a 150-day facility
The wholesaler never funds the £120,000 from its own cash, and the limit becomes available again once the retailer pays. Where the customer’s payment terms stretch beyond the facility term, the usual answer is to pair the trade facility with invoice finance so the invoice is advanced against on delivery and the trade drawdown clears immediately.
Standalone Trade Finance Without Invoice Finance
Many lenders will only provide trade finance if you also run an invoice finance facility with them, because the invoice gives them a defined repayment route. That structure does not suit everyone — particularly B2C retailers, ecommerce sellers and anyone selling on card or marketplace terms rather than raising invoices on credit.
We work with lenders who will offer standalone trade facilities with no requirement for factoring or discounting. If you have been told trade finance is only available bundled with invoice finance, that was that lender’s policy rather than a rule of the market.
For ecommerce and marketplace sellers specifically, stock finance and revenue-based options are often a better structural fit than a traditional trade line.
What You Need To Qualify
Criteria vary by lender, but most will want to see:
- A UK limited company, generally with at least 12–24 months of trading
- Evidence of the transaction — purchase orders, supplier invoices, proformas
- Identifiable end customers, ideally creditworthy businesses
- A margin on the deal that comfortably absorbs the cost of the facility
- Filed accounts and recent management figures
- A track record with the supplier, or at least a credible one
Security is normally a debenture over the company, and often a personal guarantee from the directors. Some lenders take a charge over the goods themselves.
What Trade Finance Costs
Trade facilities are usually priced with two components: an arrangement or facility fee when the line is set up and renewed, and a usage fee charged on what you actually draw, for the days you have it. On imports there may also be foreign exchange costs on the supplier payment.
Pricing varies widely with the size of the facility, the sector, the strength of your accounts and the creditworthiness of your end customers, so a published rate would be misleading. What matters commercially is whether the total cost of the cycle is comfortably inside your gross margin on the order — and that is the first calculation we will do with you.
We charge you no broker fee. We are paid a commission by the lender if you proceed, which is disclosed and does not increase your cost.
Trade Finance FAQ
What Is Trade Finance?
Trade finance is a type of revolving business funding used to pay suppliers in advance for goods. It is most often used for imports, but can also fund domestic suppliers where there is a corresponding purchase order. The lender pays the supplier directly and you repay from the sale proceeds, typically within 60 to 150 days.
How much can I borrow on a trade finance facility?
Facilities generally run from £10,000 up to £3 million. The limit is driven by your order book, your margins and the creditworthiness of your end customers rather than by turnover alone, so a business with strong confirmed orders can often access more than its accounts would suggest.
Can I get trade finance without invoice finance?
Yes. Many lenders require an invoice finance facility alongside, because the invoice gives them a clear repayment route, but not all do. We work with lenders who provide standalone trade facilities, which suits B2C retailers, ecommerce sellers and businesses that do not raise invoices on credit terms.
How long does trade finance take to arrange?
Typically two to four weeks for a new facility, depending on how quickly documents come together and whether credit limits on your end customers need approving. Once the line is in place, individual drawdowns are usually same-day or next-day.
Can trade finance pay overseas suppliers in their own currency?
Yes. Most trade lenders can settle in major currencies including US dollars, euros and renminbi, and will handle the foreign exchange. That removes the need to hold currency yourself, though the exchange cost forms part of the total cost of the transaction.
Is trade finance the same as a letter of credit?
No, though they solve a similar problem. A letter of credit is a bank undertaking to pay your supplier once shipping documents are presented; it provides security to the supplier but does not itself extend you credit. A trade finance facility advances the money. Some facilities can issue letters of credit as well.
Can a new business get trade finance?
It is harder, because lenders want a track record with both the supplier and the customer. Under two years of trading, the realistic routes are a facility supported by a strong personal guarantee, or a smaller purchase-order-backed line against a single confirmed contract. We will tell you early whether it is placeable.
Related Funding Options
- Stock finance — fund inventory you hold, rather than a specific supplier payment
- Invoice finance — release cash against invoices you have already raised
- Revolving credit facility — general-purpose headroom you draw as needed
- Business loans — where the requirement is not transaction-specific
Apply For Trade Finance Today
Tell us what you are importing or buying, who your customer is and what the margin looks like, and we will tell you which lenders will consider it and roughly what it should cost. No documents needed for a first conversation.
Call 0161 546 9128 or fill in the form below and we will be in touch straight away.
Bolton Business Finance Ltd is a commercial finance broker. We arrange non-regulated business and commercial property finance only. We are not authorised or regulated by the Financial Conduct Authority. Facility terms, limits and pricing are determined by the lender and subject to underwriting. This page is general guidance, not advice.