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    Trade Finance

    Trade Finance 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.

    What is Trade Finance?

    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, 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.

    What Businesses use Trade Finance?

    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

    How does Trade Finance work?

    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.

    Step-by-step process of Trade Finance for Importers

    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.

    Step-by-step process of Trade Finance for Exporters

    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.

    What are the benefits of Trade Finance?

    Trade Finance gives your business the funds and security your business needs to seize opportunities and grow. It can mitigate risk, improve liquidity, support customer relationships, and is often the difference between success and failure. Specific benefits include:

    Short-term financial cover

    Trade finance helps to cover the gap between incoming and outgoing payments to keep your business operating smoothly.

    Flexible credit for buyers and sellers

    Trade finance allows our lenders to provide extended credit terms to buyers or pay suppliers early if needed.

    Improved cash flow

    Trade finance will give your operations extra liquidity to seize new opportunities and grow your business.

    Tailored payment terms

    We can arrange repayment terms to align with your trading cycle, from 7 to 30, 60 or 180 days.

    Finance in local and foreign currencies

    Whether you’re trading internationally or domestically, we have options to suit your business operations, such as payments to international suppliers in their local currency.

    Am I eligible for Trade Finance?

    Trade Finance is available to companies already trading domestically or cross-border. Eligibility will be based on your business’s circumstances and trading track record. Generally speaking, lenders require the following:

    • Businesses to be profitable for the last 2 years’ financial reporting periods
    • To have a positive balance sheet net worth
    • Details of assets the company or directors own 
    • Details of any liabilities
    • Description of trade cycles
    • Current purchase orders
    • Current invoices from suppliers

    What documents are required for Trade Finance?

    Financial providers can quickly assess trade finance with the proper preparation and documents. We’ll help you correctly assemble and present your information for a successful application. Typical documentation required by lenders includes:

    • 2 years of financials (profit & loss statement, balance sheet, cash flow statement) and, if available, management accounts, creditors ledger, and stock ledger
    • Budget forecast for the next financial year
    • Details of any liabilities (loans, overdraft facilities, etc.)
    • Details and references of the Directors
    • Proof of supply for product or service
    • Purchase orders and sales contract
    • Shipping and delivery details
    • Other required documentation (certificates of origin, etc.)

    Why Choose Cabbage Capital as Your Finance Broker?

    Our founder and principal broker, Brin Hayden, brings over 20 years of experience in the commercial sector, focusing on solutions for small to medium enterprises to provide a real impact.

    “I take the time to understand your business and trade requirements to find a solution that works in your best interests.

    Unlike banks or single product providers, we source finance from our network of 30+ lenders competing for your business. I bring in-depth knowledge of the intricacies of the Trade Finance process and facilities open to you. We’ll identify and source the ideal arrangement for your needs. And then walk you through the complexity of the application through to approval.

    Trade Finance can transform your business. Use it to purchase more stock, place larger orders, and unlock bulk discounts and economies of scale. If you want to reduce payment gaps in your trade cycle and smooth supply chain transactions., or you want to know more, talk to me.”

    Let’s get started

    If you’d like to book a meeting to discuss your needs or start a finance application, leave your details, and we’ll get back to you within 24 hours.
    Alternatively, call Brin at 0418 574 655. 

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