Trade Finance provides customers the ability to import goods either from the UK or domestically. If the facility is provided in conjunction with an invoice discounting facility a complete funding solution is provided from start to finish.
For example if a business is importing television sets from China a trade facility would provide a facility to import the goods. Providing the televisions had been pre sold it is possible to get 100% funding. The trade facility would be repaid when the goods are imported and sold in the UK and an invoice is raised to the UK purchaser. When the invoice is raised to the UK buyer either an invoice discounting or factoring facility will repay the trade facility. It can be seen the trade facility and the invoice discounting facility dove tail nicely together to provide a total funding solution.
This type of trade facility is more likely to be provided by an independent invoice discounting company that will take a more flexible and commercial view. Therefore as long as the end purchaser in the UK is verified an reliable the funders know there exit route and as such will be more likely to fund new start businesses, poorly trading businesses and businesses unable to raise finance by their own banks.
Tags: invoice discounting, trade finance
