International trade finance companies meet the most pressing needs of global businesses – risk management and finance. Using creative and effective financial tools such as export factoring, vendor, and invoice financing, the best trade finance solutions help companies by assuming the risk associated with a supply and demand business.
Most industry types involved in exporting and importing benefit from international trade finance, including: automobile, apparel and textile, electronics, and industrial and mechanical. The best supply chain finance companies work with:
- Import and export companies
International trade finance companies offer creative financial solutions for companies around the globe. Such financial tools are best used for funding growth, managing foreign currencies and sales, bridging cash flow downturns, and managing demand fluctuations.
Businesses Seeking Growth
There are many moving parts in a business that require cash, including growth. At times, money is out of reach. It could be tied up in purchases and supply inventory. Its value may also be locked in receivable invoices.
Adding to the challenge, many businesses don’t qualify for traditional financial loans such as bank loans or government-backed lending. That leaves some companies in a difficult position – poised to grow but held back by lack of capital and cash flow.
International trade finance offers several tools for supply chain businesses seeking growth:
Vendor financing: Vendor financing can be useful when your business is growing. For example, you may have an influx of orders, but your supply inventory reserves are decreasing. Vendor financing can be the right solution to help you increase your supply and meet your new demand without substantial added capital.
Export financing: Export financing is helpful to your customers who work with a shifting product demand throughout the year. Retailers may have difficulty meeting payment terms when profits dip. Export financing through a trade finance company can equip you to extend payment terms, so your customers have flexibility, and you don’t sacrifice cash flow.
Inventory financing: Growing your business with generous payment terms for your retailers makes sense, but the growth must be counterbalanced in order not to spread your cash flow too thin. Inventory financing ensures you have access to capital based on your inventory. If you deal in tangible goods with a robust export market, inventory financing is a perfect finance solution.
Factoring: If you are looking to gain market share, but need an influx of capital, factoring offers an appealing solution. Factoring involves the purchase of your accounts receivable by a trade finance company in exchange for cash that represents the majority percentage of their value. The trade finance company then collects payment from your buyers once it is due. The beauty of factoring for a company planning to grow is that it doesn’t appear on your company’s balance sheet as debt.
Businesses Selling Internationally
Large scale import and export companies work with retailers and suppliers in various countries. Keeping up with currency regulation and laws in multiple countries presents risks and challenges. International trade finance companies work in numerous countries and assume the risks of dealing in foreign currency.
With currency protection in place, your business is free to work with a single or many international retailers and suppliers – without the potential problems associated with currency exchange.
At some point, most companies experience periods of financial stress. Unfortunately, many international companies do not qualify for traditional lending options. Trade financing offers attractive solutions for financially-stressed companies who need improved cash flow.
Export factoring, for example, can be utilized to bridge the payment between your orders and your receivables. Further benefits of factoring include:
- Accelerated cash flow
- Streamlined business operations as a trade finance company can also handle collection processes
- Customization based on your business needs. You can select what invoices to factor in any given month
Factoring is a useful financial tool for all stages of growth. Startups, as well as established supply chain companies, can benefit.
Businesses that Need Consistent Income while Demand Fluctuates
If your purchasing companies experience fluctuations in demand, they may struggle to meet payment terms. In these cases, you may want to consider alternative financing solutions. A trade finance company works with your customers, offering them extended payment terms when needed. The result is a win-win scenario in which your business collects as planned and your retailers get some reprieve on when payment is due during times when they need it.
Finance Solutions for Today’s Global Businesses
As lending regulations tighten, many companies and industries seek alternative lending and cash flow solutions. By offering creative and useful financial services, Tradewind has become a leading international trade finance company.
Whether your business is planning growth, needs a quick influx of capital or is struggling to manage international currencies and regulations, Tradewind can help.