HOW CAN TRADE FINANCE FREE YOUR BUSINESS TO GROW?
The right Trade Finance could enable you to:
- Buy what you need when you need it – both stock and assets
- Save money with bulk buy and early payment discounts
- Avoid being put on credit hold for late payments
- De-risk your supply chain and guarantee your supplies
- Have the reserves to invest in new business opportunities
- Get a good night’s sleep instead of worrying about how to pay the bills
- Win more sales with Buy Now Pay Later facilities for your customers
If you have to pay your suppliers and contractors long before your customers pay you, then without the right Trade Finance you could get stuck in a growing Cash Gap.
Trade Finance Facilities are specific finance products that loan you the money to pay supplier invoices – so you can use the cash in your business to operate it more efficiently.
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CAPITAL STRATEGIST
WHO CAN BENEFIT FROM TRADE FINANCE?
CASH FLOW CAN BE A NIGHTMARE FOR SMALL BUSINESSES
Finding the money to operate efficiently keeps way too many Australian small business operators awake at night.
It doesn’t just cost them in the constant stress and energy required to juggle their money to pay the bills – it also costs them in efficiency and reputation.
Many people think of this as a cash flow problem – which sounds like the answer is somehow to develop better timing. However, in most industries where you pay for materials well before you get paid for your products and services, “better timing” is just not possible!
What you have is not a “cash flow” problem – your business has an embedded Cash Gap. Why? Simply because of the big difference between the time you have to pay for materials and the time that you get paid for your products/services.
- You can’t access volume buying discounts
- You can’t access early payment discounts
- You can’t upgrade equipment and get more efficiencies
- You’re forever running out of materials and fighting fires
- You start to let down customers, losing trust and reputation
- You start missing supplier payments, losing trust and ending up on credit hold
The right Trade Finance could give you access to the Working Capital you need to free your business from the Cash Trap.
WHO CAN TRADE FINANCE HELP MOST?
If you spend a lot on materials and equipment well before you get paid by your customers, the right Trade Finance could give you the Working Capital you need to de-stress your days and grow your business.
Trade Finance is great for the majority of smaller businesses, however, it can be particularly valuable when:
- You buy supplies overseas that take a long time to land
- You need to buy expensive assets and equipment
- Your inputs have long delivery lead times
- Your business process takes a long time to turn inputs into invoices
- You need to buy big quantities to get good discounts
- You want to buy in advance to ensure critical supplies
Trade finance is a great choice if you are planning on expanding your business or you have recently won a new contract and require funds to support the anticipated growth.
Trade Finance can either be used on its own, or you can combine it with other finance tools such as Asset Finance and Cashflow Finance to deliver the Working Capital that your business needs to be more efficient and more successful.
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CAPITAL STRATEGIST
THERE ARE THREE MAIN TYPES OF TRADE FINANCE
Recognised as one of the leaders in the business lending industry, we specialise in providing flexible short term funding to Australian business owners. We have funded countless business owners, and have consequently helped them build their businesses into successes.
Our business short term loans offer business owners like you many advantages, with a quick and easy application process. Offering you a decision within minutes, our loans provide you with flexible repayment options tailored to your business’s cash flow.
Regardless of the size of your business, with a short term loan, you can be assured you are dealing with one of the fastest growing companies in the business lending sector, with a highly professional team who understand the needs of our customers.
INTERNATIONAL TRADE FINANCE
If you buy goods overseas, an International Trade Finance Facility can give you a revolving Line of Credit to pay for purchases in another country.
Your lender provides you with finance to pay specified/approved overseas suppliers invoices.
Terms are typically up to 180 days.
Some lenders can also help you manage the exchange rate risk between currencies.
DOMESTIC TRADE FINANCE
If you buy goods locally, a Domestic Trade Facility will give you a revolving Line of Credit to pay for those purchases.
Your lender provides you with the finance to pay specified/approved local supplier invoices.
Terms are typically from 45 – 120 days.
Domestic Trade Finance is useful for accessing early payment and bulk buy discounts.
BUY NOW PAY LATER FINANCE
Buy now, pay later finance for business is new to the Australian marketplace. It enables you to purchase goods on a credit basis.
Depending on the Finance Facility, you can spread your payments out over four months or even 6 months.
Not only is buy now pay later finance great for your own purchases – it’s a valuable offer you can make to your customers.
IS YOUR BUSINESS STUCK IN A CASH TRAP?
Talk to us about how you can get back in the driver's seat
HOW INTERNATIONAL TRADE FINANCE WORKS
International Trade Finance is a Finance Facility (such as a Line of Credit) where a lender provides you with money to pay for items ordered from overseas.
It’s particularly useful because overseas purchases typically have long lead times between ordering and delivery – and paying up front can tie up a lot of money and have a significant impact on your Cash Flow.
How International Trade Finance works:
- You order goods from a supplier – who may be based in Australia or overseas
- You receive the supplier’s invoice and send it to your lender
- The lender provides finance specifically for you to pay the supplier’s invoice
- You receive the goods and use or on-sell them
- You pay the lender the invoice amount on terms set by the lender – usually on terms of up to 180 days
- Depending on your needs and the specific Finance Facility, the lender may also help you manage the exchange risk between currencies
Unlike a bank loan, you only pay for the finance you actually need for your purchases, not a fixed loan amount.
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CAPITAL STRATEGIST
HOW DOMESTIC TRADE FINANCE WORKS
Domestic (or Local) Trade Finance is a Finance Facility (such as a Line of Credit) where a lender provides you with money to pay for items ordered locally.
It’s particularly useful when there are long lead times between ordering and deliver – because paying up front can tie up a lot of money and have a significant impact on your Cash Flow.
How International Trade Finance works:
- You order goods from a local supplier
- You receive the supplier’s invoice and send it to your lender
- The lender provides finance specifically for you to pay the supplier’s invoice
- You receive the goods and use or on-sell them
- You pay the lender the invoice amount on terms set by the lender – usually on terms of up to 120 days
Unlike a bank loan, you only pay for the finance you actually need for your purchases, not a fixed loan amount.
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CAPITAL STRATEGIST
HOW BUY NOW PAY LATER TRADE FINANCE WORKS
Buy Now Pay Later solutions provide SMEs with the ability to purchase goods on a credit basis.
They can help you bridge the cash gap in different ways:
- As a specialised / dedicated business credit card (NOT a personal Credit Card) that has an interest free period and a minimum payment due
- As a simple extended term arrangement where instead of paying the entire amount in one payment you can spread your payments out over four months or even 6 months
Not only is this valuable for your business and your purchases. It’s also a great offer to make to your customers – and one that can help smooth your cashflow:
- Customers will find the buying decision easier if they can pay your invoice in multiple payments over a longer period
- You’re getting paid up front – which may well be significantly earlier than your normal credit terms
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CAPITAL STRATEGIST
GET THE RIGHT WORKING CAPITAL STRATEGY FOR YOUR BUSINESS
At Finance For Business, our experts have been helping SME businesses escape a wide range of cash traps since 2009, tailoring Working Capital Strategies that meet their specific needs.
We use a whole toolkit of finance options, including Trade Finance, Cash Flow Finance, Asset Finance and Working Capital Finance to create comprehensive Supply Chain Finance solutions.
If you spend all your time waiting to get paid, or lie awake at night wondering how to pay the next round of bills, then give us a call to talk about making your escape.
