The trade cycle gap
An importer typically pays a supplier at or before shipment, waits weeks for goods in transit, then offers the end buyer 30 to 90 days of credit. That can be a 120-day cash gap on every order. Growth makes it worse: each additional order widens the hole before it fills it.
Letters of credit and import finance
A documentary letter of credit substitutes your bank's covenant for yours: the supplier ships against a bank undertaking to pay on presentation of conforming documents. Import loans then finance the period between paying the supplier and being paid by your buyer, usually secured on the goods and the resulting receivable.
Pre-export and purchase-order finance
Where you need cash before goods exist, pre-export and purchase-order finance advances funds against a confirmed order or contracted offtake. Funders will want a creditworthy buyer, a clear route from raw material to delivery, and often direct control of payment through an assigned account.
Supply-chain finance
Supply-chain programmes are anchored on a strong buyer: suppliers are paid early at the buyer's credit risk rather than their own, and the buyer keeps or extends its payment terms. For suppliers to large corporates this is usually the cheapest liquidity available.
What it costs and how long it takes
Facilities are typically priced as a margin over a reference rate plus issuance or utilisation fees. First facilities for a new relationship take three to eight weeks depending on KYC, counterparty checks and security. Renewals and drawdowns thereafter are usually days.
Frequently asked questions
Is trade finance available to first-time importers?
Yes, where the transaction chain is clear and counterparties are creditworthy, though initial limits are usually modest and grow with a track record.
Can trade finance sit alongside a bank overdraft?
Often yes, subject to intercreditor arrangements or a carve-out from existing security over stock and debtors.
What documents do funders need?
The purchase order or contract, supplier and buyer details, proforma invoices, shipping and insurance documents, and your recent financials and bank statements.
Last reviewed: 2026-08-15