How to Globalise Your Business with Trade Finance

Today it is not only the largest multinationals that can trade effectively across borders. More and more small and medium sized businesses are grasping the opportunities that overseas trade offers in order to take their companies global. With the growth of the internet and online technologies, there are fewer barriers to expanding overseas. But financing overseas expansion can be tough for smaller companies. Here’s what you need to know about affording the cost of globalisation for your business.

Managing Cashflow and Risk

For any business, managing cashflow against risk is critical to business success. You need a healthy cashflow in order to meet your financial demands as well as grow the business. And it is even more important when you are dealing with overseas trade. Cashflow concerns and risk rise when you cross borders. You may be increasing your trade volume by selling to buyers overseas but experiencing a cashflow problem when you need to pay wages while a buyer has yet to settle their account. Or you could be negotiating a deal for the purchase of goods abroad, but you know you will run out of cash while you are waiting for these goods to sell. When you are doing business overseas you need to be able to access cash even while you are waiting for goods to be delivered or sold. For many businesses that are starting up, or just beginning an overseas expansion, it can be extremely difficult to access this cash on a regular basis. There is also a greater risk associated with dealing in foreign currencies, and with the complexities of customs and overseas shipping which can cause delays and further cashflow headaches.

Trade Finance Solutions

A trade finance agreement is useful when your business is experiencing these problems with cashflow associated with overseas trade, or with buying goods in the UK. A trade finance solution in a simple form provides a line of credit so that you can buy goods without terms, and be able to run your business while you are waiting for products to be produced or to sell. The advantage of a trade finance agreement is you have access to cash that would otherwise be tied up for weeks or months on end. You can use this cash leverage to negotiate a better deal with suppliers than you would otherwise have been able to achieve.

Additional Trade Finance Assistance

In addition, trade finance specialists can assist in arranging all aspects of the trade, from purchasing the product through to collecting monies and organising the sales ledger. If you have little experience in overseas trade, finance experts can assist in the complexities of import VAT and duty, overseas shipping and freight charges, and customs issues. When looking to globalise your business, spread the risk and manage your cashflow with a trade finance solution that helps you grow successfully overseas.

Image via Stuart Miles/

Article by Kyle

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