Question 1

What is trade finance and how does it work?

Accepted Answer

Trade finance is a set of funding and risk tools that help businesses buy, sell, or move goods across supply chains. It covers pre-shipment finance, post-shipment invoice finance, letters of credit, supplier payments, and import or export funding. A lender advances cash against purchase orders, invoices, stock, or receivables so the business can pay suppliers and fulfil orders without waiting for customer payment.

Question 2

Who can use trade finance?

Accepted Answer

UK limited companies, LLPs, and larger partnerships that trade goods or services with other businesses can use trade finance. Lenders typically look for trading history, verified purchase orders or invoices, and creditworthy buyers or suppliers. It is used by importers, exporters, wholesalers, manufacturers, and distributors.

Question 3

What is the difference between trade finance and invoice finance?

Accepted Answer

Invoice finance is one type of trade finance. It releases cash tied up in unpaid invoices. Trade finance is broader and also includes purchase order funding, supplier finance, import finance, export finance, letters of credit, and stock or inventory finance. Many businesses use a combination of facilities across the cash cycle.

Question 4

How much does trade finance cost?

Accepted Answer

Costs vary by facility type, risk, and term. Invoice finance typically charges a service fee of 0.3% to 2.5% of turnover plus a discount charge linked to base rate or SONIA. Import, export, and purchase order finance are usually priced as a margin over the funding cost. We structure each facility individually and quote total cost before you proceed.

Question 5

How quickly can a trade finance facility be set up?

Accepted Answer

Simple invoice finance facilities can be set up in 5 to 10 working days. More complex import, export, or purchase order facilities may take 2 to 4 weeks while buyer or supplier risk is assessed and security is perfected. We provide a clear timeline during the initial proposal.

Question 6

Is trade finance regulated in the UK?

Accepted Answer

Trade finance providers may be regulated by the Financial Conduct Authority depending on the product and structure. Tradeflow Business Finance is a commercial finance broker and introduces clients to regulated or unregulated lenders as appropriate. We are transparent about whether a facility is regulated and what protections apply.

Trade Finance Solutions

What Is Trade Finance? A UK Business Guide

Working capital & receivables

Invoice Finance

Asset Based Lending

Business Loans

Cross-border trade

Export Finance

Import Finance

Supplier Finance

Purchase order & project funding

PO Finance

Inventory Finance

Construction Finance

Strategic finance

M&A Finance

Asset Based Lending

Latest insights

Trade finance FAQs

Not sure which facility fits?