What is Food & Drink Trade Finance?
Food & Drink Trade Finance
The UK has an international reputation for reliably producing quality food and drink products for international clients, and imports huge volumes of produce to satisfy its consumers’ increasingly diverse food tastes. Despite the UK exporting £18.1bn of food and drink products to over 200 countries and territories in 2015, huge demand exists for these products. At the same time, just a fifth of UK food and drink companies export, with exports accounting for just 19% of the turnover of the UK food and drink industry. Firms looking to import and export food products into the UK therefore face huge opportunities for profitable growth, if they can initiate or grow their ability to engage with international trade.
However, trade cycles represent a huge risk to firms whose business models rely on them servicing suppliers reliably as part of the just in time supply chain model. The lengthy delays caused by international transportation, the complexities of maintaining product quality on those journeys, and the risk of non-payment to suppliers not based in the same trade jurisdiction can all make food and drink firms apprehensive about engaging in international trade of their products. To assist with these risks, Trade Finance Global can offer access to trade finance funding and a suite of finance tools to support international ventures involving food and drink firms.
Key food & drink products financed include:
- Sausages, hams and other preserved meats
- Processed or preserved meats
- Offal and offal products
- Processed or preserved fish and crustacean products
- Processed or preserved potatoes and potato products
- Other processed or preserved vegetables
- Fruit juices
- Vegetable juices
- Your accounts are historically profitable
- You and your business are creditworthy
- You have identified and confirmed buyers for your product
Trade Finance Global offers trade finance to firms without large capital requirements. Instead, products such as accounts receivable finance secure lending against orders or invoices confirmed in firms’ accounts. These products can be tailored to the needs of food & drink importers and exporters to provide credit facilities to firms looking to pay suppliers promptly and repay loans on extended payment terms. This service can hugely help food & drink producers managing a large volume of transactions across borders, as otherwise the delays involved in transportation and payment can cause severe cashflow issues even for profitable firms with confirmed buyers.
What is the SIC Code for Trade in Food & Drink?
The sheer volume of products within the Food & Drink industry mean a plethora of SIC codes exist covering their production and processing. These include:
|10110||Processing and preserving of meat|
|10120||Processing and preserving of poultry meat|
|10130||Production of meat and poultry meat products|
|10200||Processing and preserving of fish, crustaceans and molluscs|
|10310||Processing and preserving of potatoes|
|10320||Manufacture of fruit and vegetable juice|
|10390||Other processing and preserving of fruit and vegetables|
Industries which wholesale food products are covered by separate SIC codes. Separate trade finance pages exist for food producing industries, such as Farming & Livestock, Fruit, and Marine & Fishery Finance.
A small Scottish food production business determined to expand its sales in China worked with TFG and its buyers to ensure it was paid promptly before exporting its products.