The modern day economy is globalised. More and more businesses are finding themselves involved in international trade in one way or another, including businesses of various sizes and across various industries. 

While international trade provides a unique opportunity to expand your business’s reach, customer base and potential success, it comes with its own set of challenges. 

One of these challenges is the facilitation of international business payments. In other words, how you get paid for the goods and services you export and how you pay for the goods and products you import in a timely and secure manner. 

The Role of Trade Finance

This is where Trade Finance solutions come in. Trade Finance provides businesses seeking to engage in international trade with a strategy for mitigating the inherent risks associated with doing business with overseas partners. 

From providing the working capital required to finance exports or imports to protection from fraud and non-payments, there are many reasons why you should consider Trade Finance. 

How does Trade Finance work?

There are four elements to Trade Finance that can provide independent support or work together to enable your international or domestic business. 

Payment facilitation

With a Trade Finance solution, businesses can ensure the fast transfer of funds to pay for the importing of required goods or services. This can ease any gaps that exist in cash flow and can protect both parties in the transaction from non-performance risks. 

Risk mitigation

For international trade partners, there is always going to be a certain element of risk. However, a Trade Finance facility ensures the conditions of payment to mitigate that risk as much as possible. For businesses who are just establishing themselves as an international trade partner, this can be essential. 

Finance provision

Funding can be provided at every stage of the international trade transaction. For businesses with difficulties accessing working capital to establish themselves, this can be critical. Suppliers or exporters can receive payment before delivery is made and buyers or importers can avoid their own cash flow gaps. Over time, a more trusting and reliable relationship can be built. 

Effective communication

Miscommunication is, unfortunately, a common cause of international trade disputes between importers and exporters. With Trade Finance, miscommunication can be minimised. Accurate, timely and comprehensive information is provided to both parties in the transaction ensuring confidence across the board.  

What are the benefits of using Trade Finance?

1. Improve your cash flow

One of the key advantages of a Trade Finance solution is that it can help improve your business’s cash flow. By providing the working capital you need to finance your international trade, your business will be in a better position to take advantage of new opportunities the market (domestic or international) presents and grow your business. 

2. Reduce your risk

International trade does come with risk. This is especially true if you are just beginning to engage with international partners. Trade Finance allows you to reduce the risks associated with international trade and give you peace of mind that the likelihood of fraud and non-payment is reduced. This means you can focus on what you’re really good at: Growing your business. 

3. Simplify your transactions

Trade Finance can also facilitate easier international transactions. By offering the tools, support and guarantees you need, businesses are able to more seamlessly, quickly and effortlessly conduct international trade. 

ScotPac’s Trade Finance Solutions

ScotPac’s wide range of financial solutions include tailored Trade Finance, customised to suit your business. Our lending specialists have facilitated global marketplace participation for businesses of all sizes. 

How do we do this?

Letters of Credit 

A letter of credit is a document issued by a lending institution, such as ScotPac, that guarantees that payment will be made to the seller of goods or products. In the case of international trade, this provides the exporter with protection from the risk of non-payment by the buyer. It can help establish trusting and reliable relationships between international trade partners. 

Trade Finance Loans 

A Trade Finance loan provides a similar benefit to traditional business loans. It allows a business to access the working capital they need to finance international trade from a foreign supplier. By improving cash flow and allowing businesses to take advantage of global opportunities, Trade Finance loans can be essential for facilitating growth. 

Why choose ScotPac for your Trade Finance needs?

ScotPac is the largest non-banking lender in Australia and we have been providing customised financial solutions for more than 35 years. But that’s not why our clients choose us. 

We view our clients as partners, rather than transactions, and develop deep and real relationships to ensure that we understand their business and can provide invaluable support for long term growth and success. 

Our lending specialists customise our financial facilities, including Trade Finance, to unlock the potential in our clients’ businesses. It is our policy to find a way to say “yes”. 

Contact the ScotPac team today

Are you an import business needing to prepare for peak trading from Spring through to December, with a need for product on shelves by September / October? If so, you’re well aware that product will need to be shipped by July/ August leaving you with orders needing to be paid for in the next few months.  

Whether you would like to find out more about our Trade Finance solutions or would simply like to speak to one of our lending specialists about finding the right financial solution for your business, contact us today.