Trade Finance

Trade Finance

Otherwise known as export finance, trade finance is the general term for the financing of goods and services that are acquired through international or domestic trade and sold to Australian customers. It is particularly applicable if the stock is not likely to be immediately sold and will be stored, so is suited for wholesale, distribution, manufacturing or trade businesses. 

As an importer, you would order goods from a supplier and once their invoice has come through, finance is provided to pay the invoice. Once you’ve on-sold or used the goods, you pay back the invoice amount. As an exporter, you would receive an order from an overseas customer and based on the purchase order, the lender will provide the finance for your manufacturing needs. Once the customer pays you for the goods, you repay the lender. 

This solution allows a smooth cashflow, increases your purchasing power and is a useful way to smooth out trade volatility as an importer or exporter.