Trade Finance

In this Global economy, more and more businesses are trading with overseas territories.

Whether you are importing or exporting, Select Business Finance can help you source appropriate trade finance for your business.

Funding for Importers:

• Stock Finance.
  There are a number of specialist funders who will provide up to 100% finance, covering the full purchase price (including VAT and freight). Naturally, in order to achieve such a high funding rate, you will need to be working to a healthy gross margin, and to have confirmed orders from your customers for the goods you are importing. However, even without confirmed orders, import finance can still be sourced.
• Letters of Credit.
  This is a very common form of finance, whereby the issuer of the Letter of Credit (usually a Bank or institution of similar standing) guarantees to pay your supplier, providing the goods and documents submitted comply with expectations.
• Bonds and Guarantees.
  This is an irrevocable promise from a Bank to make a payment to your supplier, providing the terms of the bond are met.
• Trade Cycle Finance.
  Where you are importing finished goods, this form of finance combines stock finance with invoice discounting to provide you with “end to end” import finance. This can have a hugely beneficial impact on cashflow for the right business.
• Import Factoring.
  This is a service offered by a UK factoring company to your suppliers, whereby the UK based import factor will collect payment from you as it falls due, and make payment to your supplier. This can be coupled with credit insurance to offer further certainty to your supplier. The key advantage here is that this does not impinge on your own funding lines.

Funding for Exporters:

• Factoring or Invoice Discounting
  Many invoice finance providers are comfortable financing export sales, and this enables you to drawdown up to 90% of your invoice value within 24 hours of raising the invoice.
• Credit Insurance
  Not really finance but, in situations where your overseas customer cannot raise a Letter of Credit to guarantee payment, credit insurance offers considerable peace of mind. Obtaining status enquiries / credit checks on foreign companies can be very difficult, so insuring your export sales is a prudent step. An export credit insurance policy also makes it easier to obtain invoice finance against these sales.
• Forfaiting
  For larger export projects, forfaiting enables you to sell the benefit of an invoice to a funder on a non recourse basis (ie with no financial risk), leaving you liable only for the quality and reliability of the goods or services supplied.

Importing or exporting for the first time can appear daunting, but we can help you to consider the various finance options available to you. We have relationships with a number of specialist trade financiers, and can usually find solutions to most requirements.