Trade Finance

Trade Finance is a type of business loan that provides short-term working capital solutions for your export, import or domestic trade business. You can use these facilities to pay operating expenses and upfront costs until you get paid. Whether you need to buy stock here or overseas or you’re waiting for customers to pay, we’ll secure the best finance available to bridge your cash-flow gap. And we’ll manage the entire process for you.

Trade Finance allows small to medium enterprises to take on the world. It can level the playing field by giving you access to materials, goods, or services not available domestically. Or it can open the door to a global marketplace to drive growth. Whether you’re importing or exporting, easing the supply of credit where the opportunity is greatest can have a huge impact on your SME business.

Trade finance is an umbrella term for different forms of credit tailored to the needs of importers and exporters at any point in the trading process. Trade Finance is most often used to finance goods or services and bridge the funding gap between buying or selling stock and receipt of payment. 

Put simply, Trade Finance is used by businesses to purchase stock, equipment and asset, materials, and inventory without depleting their cash reserves.

Trade Finance encompasses a variety of financial products to help traders manage their cross-border payments, associated risks, and working capital needs and dramatically facilitate the growth of your business.

A variety of business-to-business importers and exporters use Trade Finance, including: 

• Manufacturing
• Food and Beverage 
• Pharmaceuticals
• Healthcare
• Retail
• eCommerce
• IT hardware and equipment
• Materials

Every trade requires a buyer and a seller.

Trade Finance makes it possible and easy for importers (buyers) and exporters (sellers) to trade by introducing a third-party provider (lenders) to enable transactions and remove risk.

For example:

Trade Finance for importers

A buyer/importer will order stock from a supplier in Australia or overseas. Upon receiving an invoice, they send it to their lender. The lender provides finance for the importer to pay the supplier. The importer receives the goods, uses them, or on-sells them for profit. They then repay the lender.

In this way, importers can afford the stock they need before they’ve earned the money to pay for it.

Trade Finance for exporters

A seller/exporter receives an order from a customer in Australia or overseas. Their lender provides them with the finance needed to manufacture and fulfil the order. They produce the goods and ship them to their customer. The customer pays the seller for the order received. The seller can then repay the lender. This facility allows exporters to avoid sinking all their working capital into upfront production costs and strangling the business’s cash flow.

Many Trade Finance facilities and lenders are available to enable scenarios like those above. 

Trade Finance products and instruments enable buyers and sellers to honour agreements and aid transactions. Cabbage Capital can help you determine what tools you require and secure the most competitive lender for you.

Place an order

You order goods or services from a seller in Australia or overseas.

Send invoice

You receive the seller’s invoice and send it to your lender.

Receive finance

The lender provides finance for you to pay the seller’s invoice.

Receive goods

You receive the goods or services and use or on-sell them for profit.

Repay lender

You repay the lender the invoice amount with interest.

Take an order

You receive an order from a customer in Australia or overseas.

Receive finance

The lender provides you with the finance needed to manufacture the order.

Deliver goods

You ship goods and services to the customer.

Receive payment

The customer pays you for the order.

Repay lender

You repay the lender the amount borrowed with interest.