Trade Finance Ireland | 2020 Trade Finance Guide

2021 Guide | Trade Finance Global

Trade Finance - Ireland

Welcome to the Ireland Trade Finance and International Trade hub. Find out how our Ireland-based team can help you access trade finance to increase your imports and exports, or find the latest research, information and insights on trade finance here.

What is trade finance?

Trade Finance is the financing of goods or services in a trade or transaction, from a supplier through to the end buyer. It accounts for 3% of global trade, worth some $3tn annually. ‘Trade Finance’ is an umbrella term, which includes a variety of financial instruments that can be used by an importer or exporter.

These include:

  • Purchase Order Finance
  • Stock Finance
  • Structured Commodity Finance
  • Invoice Finance (Discounting & Factoring)
  • Supply Chain Finance
  • Letters of Credit (LCs) and;
  • Bonds & Guarantees

The terms Import Finance and Export Finance are used interchangeably with Trade Finance.

In order to address some of the common issues and misunderstandings around Trade Finance, we have put together this short guide.

How can trade finance benefit my Ireland-based business?

Trade finance facilitates the growth of a business by securing funds required to purchase goods and stock. Managing cash and working capital are critical to the success of any business. Trade finance is a tool that is used to unlock capital from a company’s existing stock or receivables or add further finance facilities based on a company’s trade cycles.

Why does this help? A trade finance facility may allow you to offer more competitive terms to both suppliers and customers, by reducing payment gaps in your trade cycle. It is beneficial for supply chain relationships and growth.

Other benefits of trade finance

  • Short to medium-term working capital, using the underlying products or services being imported/exported as security/collateral. It increases the revenue potential of a company, and earlier payments may allow for higher margins.
  • Trade finance allows companies to request higher volumes of stock or place larger orders with suppliers, leading to economies of scale and bulk discounts. 
  • Trade finance can also help strengthen the relationship between buyers and sellers, increasing profit margins. It allows a company to be more competitive.
  • Managing the supply chain is critical for any business. Trade and supply chain finance helps ease out cash constraints or liquidity gaps – for suppliers, customers, third parties, employees or providers. Earlier payments also mitigate risk for suppliers.

It is important to note that trade finance focuses more on the trade than the underlying borrower, i.e. it is not balance sheet led. Therefore, small businesses with weaker balance sheets can use trade finance to trade significantly larger volumes of goods or services and work with stronger end customers.

Due to the embedded risk mitigants that surround trade finance lending and instruments, it leads to the potential of a diversity of supplier base for trading companies. A more diverse supplier network increases competition and efficiency in markets and supply chains.

Companies can also mitigate business risks by using appropriate trade finance structures. Late payments from debtors, bad debts, excess stock and demanding creditors can have detrimental effects on a business. External financing or revolving credit facilities can ease this pressure by effectively financing trade flows.


Get started – talk to our Ireland team

If you have a trade finance enquiry, please use the contact form below.


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Want to learn more about Trade Finance?

Look no further. We’ve put together our feature Ireland trade finance insights, research, and articles, and you can catch the latest thought leadership from the TFG, listen to podcasts and digest the latest in international trade in the region right here.

From the Editor – Trade Finance Insights

ITFA and Sullivan & Worcester issue joint guidance on the use of Risk-Free Reference Term Rates in Trade and Export Finance The guidance note looks at Term SOFR (SOFR is the Secured Overnight Financing Rate), the ARRC recommended RFR term rate
Open Banking: Forget about cloud and APIs – it’s all about value generation The trade finance space has seen a huge influx of capital in the development of fintech solutions to address some of today’s most pressing trade challenges.
Fireside chat: Contour, on platforms, competition and the misconceptions of interoperability The need for trade digitization has never been more prevalent than it is today, especially with pandemic-induced restrictions emphasizing the inefficiency of paper-based trade. Our Editor, Deepesh Patel sat down with Contour’s CEO and Chief Product Officer, as well as TradeLens’ Head of Strategy and Operations, to discuss how fintech can come together to partner to solve these problems.
TFG Weekly Trade Briefing, 17th May 2021 Your morning coffee briefing from TFG. Global inflation troughed last summer, and has risen markedly since. Britain, Ireland agree to work together to smooth post-Brexit trade and the US Colonial pipeline resumes operations following ransomware attack.
‘Brexited’ – What the new UK-EU agreement means Almost four years later, Brexit is complete. What does the new UK and the EU agreement now mean for trade, and what’s left to do?
VIDEO: CoFace – Receivables Securitisation 101 & The Role of Insurance Policies TFG hear Frederic Bourgeois , Managing Director for CoFace for UK and Ireland, about the importance of specific insurance policies for the securitisation of trade receivables. He spoke about the trends and changes in the insurance of trade receivables.
VIDEO: BREXIT… To Be Continued, Insights from Euler Hermes Head of Macroeconomic Research Trade Finance Global caught up with Head of Macroeconomic Research, Ana Boata at Euler Hermes last month at The Institute of Export & International Trade’s World Trade Summit. A very interesting macroeconomic view on how households, retail and economic growth has changed in 2019 due to trade wars, Brexit and business uncertainty.
VIDEO: Keeping UK trading after Brexit – Views from the Freight Transport Association With the UK and EU yet to reach an agreement on their future trading relationship, it is vital goods vehicle operators are as prepared as possible for a No Deal Brexit. In this scenario, new border procedures and haulier responsibilities will come into effect immediately. Hauliers must ensure they fully understand the new road haulage procedures, documentation requirements and responsibilities that will arise; otherwise, they risk their operations coming to a standstill.
Dr. Liam Fox opens The Telegraph’s ‘Future of Trade & Export’ conference The Telegraph’s ‘Future of Trade and Export’ conference sought to explore ‘new opportunities in international trade policy, finance and technology’.

Videos – Trade Finance

Trade Finance Frequently Asked Questions

What types of Trade & Receivables Finance does TFG offer?

TFG assists companies to access trade and receivables finance through our relationships with 270+ banks, funds and alternative finance houses.

We assist specialist companies to scale their trade volumes, by matching them with appropriate financing structures – based on geographies, products, sector and trade cycles. Contact us to find out more.

Trade Finance & Stock Finance

  • Trade Finance (Purchase Order Finance)
  • Stock Finance
  • Pre Export Finance
  • Import & Export Finance
  • Structured Commodity Finance
  • Letters of Credit
  • Bonds & Guarantees

Receivables Finance & Invoice Finance

  • Receivables Purchase
  • Invoice Finance
  • Discounting
  • Factoring
  • Supply Chain Finance

Specialist Trade & Receivables Finance

  • Borrowing Base Facilities
  • Back-To-Back LC Lines
  • Long Dated Receivables – Media, Sport
  • Revolving Credit Facilities (RCF)
What is the process for applying for trade finance?

1. Application

The initial ‘credit’ application drives the process when applying for credit.

Lenders will often ask for information on current assets or collateral that the business owns, including debt and overdrafts, assets that the company or directors own (property, equipment, invoices).

2. Evaluating the Application

The evaluation process will normally involve some kind of credit scoring process, taking into account any vulnerabilities such as the market the business is entering, probability of default and even the integrity and quality of management.

3. Negotiation

Eligible SMEs applying for trade finance can negotiate terms with lenders. An SME’s aim with a lender is to secure finance on the most favourable terms and price. Some of the terms that can be negotiated can include fees and fixed charges, as well as interest rates.

4. The Approval Process and Documentation of a Loan

Typically, the account officer who initially deals with the applicant and collects all of the documentation will do an initial credit and risk analysis. This then goes to a specific committee or the next level of credit authority for approval. If the loan is agreed (on a preliminary basis) it goes to the legal team to ensure that collateral can be secured/ protected and to mitigate any risks in the case of default.

Read our full ‘trade finance application process’ here.

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Latest Ireland feature from Trade Finance Talks

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