What is Trade Finance?

  • Trade finance refers to the financing of goods and services in the flow of international trade and commerce. It is a term used in reference to the financial instruments and products used by banks and companies to facilitate international trade; a transaction from a supplier through to an end buyer.

    Trade finance helps businesses to manage those risks by providing guarantees and advance payments.

Increased Revenue and Earnings

Trade finance allows individuals and companies to increase their business and revenue through trade.
Benefits of Trade Financing

• Improved Cash Flow:
Trade financing guarantees improved cash flow management by providing access to working capital and liquidity.

• Improves the Efficiency of Operations:
Trade financing ensures that business operations are as efficient as possible, This will improve your business efficiency and reduce costs.

• Increased trust between Importers and Exporters:
Trade finance can improve business interactions by providing a safe and secure environment to execute imports and exports.

Types of Trade Financing



. Letter of Credit

Also called documentary credit, it’s a written contract guaranteeing payment to the exporter by an issuing bank, commonly the importer’s bank, upon the receipt of the ordered goods.

. Import Financing

Provides immediate funds for importers to purchase goods to enhance cash flow. An example would be purchase invoice financing, where importers can pay on time while tapping into an extended credit period.

. Export Financing

Export financing is a short-term agreement through which exporters can access working capital while waiting for importers to pay their invoices.