Stock finance is a facility which specialist lenders offer – it enables firms to buy inventory and ease cash flow. Generally, a trade financier will fund all of the cost of the receivables, including charges (e.g. bank charges).

Trade finance offers upsides over more traditional bank finance such as short-term loans, and invoice finance. Trade finance provides up-front funding quickly without affecting existing bank relationships, without affecting the balance sheet.

If you’re an Edinburgh based firm who has to pay an exporter upfront, a trade finance specialist provides a Letter of Credit which warranties payment upon shipment of the merchandise to the exporter through a standard bank in his or her home country. Trade finance enables small business owners immediate access to stock finance with minimum risk because the security is guaranteed through the trade finance supplier which secures the finance against the goods themselves.

Want to more about trade finance? Find out more here