Your supplier wants a deposit before production starts, and your customers pay on 60-day terms. In between sits an order you could win, and the working capital you do not yet have.
Most Australian business owners in that position ask the same thing first: would we even qualify?
This guide sets out who may be eligible for Trade Finance in Australia, what ScotPac assesses, and how to work out where your business stands before you apply.
Who is eligible for Trade Finance?
In short, Trade Finance generally suits established Australian businesses that buy stock, inventory or raw materials from suppliers, sell those goods to business customers, and need to pay suppliers before their own customers pay them.
ScotPac looks closely at the trade cycle, including the goods being funded, the supplier relationship, the customer base and the timing between supplier payment and customer receipt.
A business may be a good fit for ScotPac Trade Finance if it:
- has an established trading history
- buys stock, inventory or raw materials from suppliers in Australia or overseas
- sells to business customers rather than directly to consumers
- has identifiable suppliers and a repeatable purchase cycle
- needs to pay suppliers before its own customers pay
That is a different assessment from a standard term loan, where the focus may be more heavily on property security, credit history or the balance sheet. For businesses with strong trade activity and reliable customers, Trade Finance may be worth exploring even if traditional finance has been difficult to access.
What are the eligibility requirements for Trade Finance?
1. An established trading history
ScotPac needs a clear picture of how your business buys, sells and collects. That usually takes a trading history to demonstrate.
Newer businesses are still worth a conversation, because other ScotPac working capital solutions have different eligibility requirements. Invoice Finance, for example, may be available to businesses with a minimum of 6 months in operation that can show consistent invoicing and collections.
2. A business-to-business sales model
Trade Finance is designed around commercial trade. Your customers generally need to be other businesses, because repayment is linked to the receipts those customers generate.
Businesses selling directly to consumers may not be the right fit for Trade Finance, but ScotPac may be able to talk through other funding options.
3. Goods that move through a genuine trade cycle
Trade Finance can support the purchase of stock, inventory, raw materials and finished goods, whether they are sourced from domestic or overseas suppliers.
The key is that there is a clear trade cycle: supplier payment, goods purchased or produced, goods sold, and customer payment received.
4. Suppliers ScotPac can identify
Your supplier relationship forms part of the assessment. Established suppliers with a track record can make the process simpler, especially where goods are being sourced from overseas.
ScotPac can also provide support for international trade, with access to trade advisors in Australia, New Zealand and China.
Why is Trade Finance often paired with Invoice Finance?
The 2 facilities solve different parts of the same timing problem.
Trade Finance supports the purchase side. It can help your business pay suppliers, secure stock or raw materials, and keep orders moving.
Invoice Finance supports the receivables side. Rather than waiting 30, 60 or 90 days for your customer to pay, your business may be able to access up to 85% of the value of eligible outstanding invoices upfront, with the balance released once the customer settles.
Used together, Trade Finance and Invoice Finance can help close the cash flow cycle from supplier payment through to customer receipt.
That also explains why the quality of your customer base matters. Because repayment is linked to receivables, ScotPac will look at the customers behind the invoices, not only the supplier relationship.
If your business sells to reliable business customers on standard commercial terms, that can work in your favour.
What security does Trade Finance require?
Trade Finance is structured around the trade transaction and the goods or receivables it generates, rather than being assessed in the same way as a standard term loan.
Depending on the facility structure, ScotPac may take security over the goods being funded, business assets or receivables. The exact security position is confirmed when your facility is assessed and structured.
For businesses growing faster than their balance sheet, that distinction can matter. It may give you a way to fund larger orders or supplier payments without relying only on traditional property-backed lending.
Does my business have to be an importer to qualify?
No. Many Trade Finance clients are importers, but the facility can also support domestic supplier payments.
The core timing issue is the same: your business needs to pay for stock, inventory, raw materials or goods before customer payment comes in.
For international suppliers, additional payment methods and controls may apply, including Telegraphic Transfer, Letter of Credit and Documents Against Payment. Facilities may also be available in AUD, USD or other currencies, depending on your requirements and facility terms.
For domestic suppliers, the process is often more straightforward.
Exporters can face the reverse timing problem, where payment arrives after goods are produced, shipped or delivered. Export situations are assessed based on the buyer, market, contract terms and receivables, so it is worth speaking to a specialist about what would suit.
Which industries typically qualify for Trade Finance?
There is no fixed list, but the businesses that fit most naturally tend to buy physical goods, hold or transform them, then sell to business customers on terms.
In practice, this can include:
- importers and wholesale distributors
- manufacturers buying raw materials or components
- transport, logistics and storage operators
- retail suppliers and trade suppliers managing seasonal buying cycles
- businesses buying equipment or machinery from overseas
If your business sits outside those categories but still pays suppliers before being paid by customers, it is worth asking the question rather than assuming the answer.
What will ScotPac assess in a Trade Finance application?
ScotPac takes a commercial view of the business and the trade cycle. An assessment will typically consider:
- your trading history
- whether your customers are creditworthy businesses
- the nature of the goods and how readily they sell
- supplier relationships and payment terms
- the customer base and its payment behaviour
- order sizes and whether the trade cycle repeats
A lending specialist will talk through your situation and let you know whether Trade Finance is likely to fit, or whether another ScotPac solution may be more suitable.
What if my business does not meet the criteria?
Not qualifying for Trade Finance today does not mean funding is unavailable.
Newer businesses, or those without a clear supplier purchasing cycle, may be better suited to another facility.
ScotPac offers a range of working capital solutions, including Invoice Finance, Line of Credit, Business Loans and Asset Finance. A lending specialist can help identify the option that best matches your situation.
How do I check whether my business qualifies?
The fastest way is a conversation.
A ScotPac specialist can talk through your suppliers, customers and cash flow cycle, then help you understand whether Trade Finance is likely to fit.
From there, ScotPac can outline what a facility may look like for your business. Once approved and set up, funding for eligible trade transactions can often move quickly, subject to the terms of your credit arrangement.
