What is trade finance?
Trade finance can help an eligible business pay approved suppliers before the goods have been sold and customer receipts have been collected.
The facility is commonly structured around a specific transaction or repeat trade cycle. Providers assess the supplier, buyer, goods, purchase order, margins, delivery terms, jurisdictions and repayment route.
Shadowfax Funding Solutions compares suitable purchase, import and trade-finance structures. Where appropriate, trade finance may work alongside invoice finance once goods have been delivered and an eligible customer invoice has been raised.
Types of trade finance
Purchase Finance
Funding for approved supplier invoices where there is a clear route from purchase through to sale and repayment.
Import Finance
Support for eligible overseas supplier payments, potentially including the period required for production, shipping and delivery.
Purchase-Order Finance
Funding linked to a confirmed customer order, subject to counterparties, margins, delivery requirements and provider controls.
Letters of Credit
A bank or specialist provider may issue a conditional payment undertaking where transaction requirements can be met.
Who may use trade finance?
Importers and Wholesalers
Businesses buying finished goods or components for resale to established commercial customers.
Manufacturers
Companies funding raw materials, components or outsourced production before completed goods are delivered and invoiced.
Distributors and Exporters
Businesses fulfilling customer orders across domestic or international supply chains with a clear repayment route.
How trade finance may support a confirmed order
A wholesaler receives a confirmed order worth £150,000 and needs to pay an approved supplier £90,000 before production and shipment.
A provider would assess the supplier, customer, goods, gross margin, delivery process and transaction documents before confirming whether funding is available.
Important: This is an illustration, not a quotation or indication of approval. Terms, controls, availability and charges depend on the transaction and provider.
What to weigh up before proceeding
Counterparties and Goods
The provider will assess suppliers, buyers, product type, title, quality controls and whether the goods can be verified.
Margin and Timescale
The gross margin and trade-cycle duration must provide enough room for funding costs and operational risk.
Repayment Route
Repayment may come from customer receipts, invoice finance or another agreed source after delivery and sale.
How Shadowfax approaches a trade-finance review
Transaction
We establish the goods, supplier, customer, values and funding purpose.
Documents
We review orders, invoices, margins, shipping details and payment terms.
Structure
We consider purchase, import, trade and invoice-finance requirements.
Market Comparison
We approach providers whose appetite fits the transaction and sector.
Completion Support
We help coordinate due diligence, conditions, documents and drawdown.
Compare trade finance with other options
Trade Finance FAQs
What is trade finance?
Trade finance is funding designed to support eligible purchases of goods, materials or stock through the trade cycle, before those goods are sold and customer payments are received.
Can trade finance support imports?
Potentially. Providers may fund approved overseas supplier payments, subject to the transaction, supplier, goods, shipping terms, buyer and provider criteria.
Can UK supplier purchases be funded?
Some providers consider domestic as well as international supplier transactions, subject to their product and eligibility requirements.
What is purchase-order finance?
Purchase-order finance may support supplier or production costs linked to a confirmed customer order, subject to margins, counterparties, delivery terms and provider controls.
Can trade finance work with invoice finance?
Yes. A trade facility may fund approved supplier costs, while invoice finance may provide working capital after goods have been delivered and an eligible customer invoice has been raised.
Are letters of credit available?
Some specialist providers and banks offer letters of credit or related trade instruments. Availability depends on the parties, transaction, jurisdictions and provider criteria.
What information will providers request?
Requirements vary, but may include accounts, bank statements, management information, purchase orders, supplier invoices, customer orders, shipping details and evidence of gross margin.
How is Shadowfax Funding Solutions paid?
Any broker fees and provider commission arrangements will be explained before you proceed.
Need to pay a supplier before your customer pays you?
We can help you assess purchase finance, import finance, invoice finance and other working-capital routes around the transaction.
Funding is subject to status, provider criteria, due diligence and final approval. Shadowfax Funding Solutions Limited acts as a commercial finance broker, not a lender. Terms, security, transaction controls, foreign-exchange exposure, availability and charges vary by provider and proposal.