Trade Finance for Manufacturers
By Joshua Giles, Founder and Director · Reviewed by the CoreFi credit team
Last updated 20 July 2026
CoreFi is a broker, not a lender. We do not set rates and lenders make all credit decisions.
In short: £25k - £5M per transaction over 30 - 180 days per transaction. The problem for manufacturers is a timing one.
The problem for manufacturers is a timing one. You pay a supplier in Taiwan or Germany on shipment. The finished goods take weeks to produce and another 30 to 90 days to collect from your customer. That gap between outgoing cash and incoming cash is where working capital gets strangled.
Trade finance pays your supplier directly, typically against a letter of credit or a supplier payment guarantee. You then repay the facility once your customer settles. Terms of 30 to 180 days are standard, and they are sized to the transaction, not to a fixed credit line you draw down slowly.
A letter of credit is the instrument that matters most here. Your bank guarantees payment to the supplier's bank once agreed shipping documents (bill of lading, commercial invoice, packing list) are presented. The supplier ships because they know they will be paid. You do not part with cash until the goods are moving. That mutual confidence is the whole point.
We have placed trade finance for manufacturers importing steel, electronics components, packaging materials, and specialist machinery parts. The lenders who do this well are not the high street clearing banks. They are specialist trade finance houses and challenger banks with actual trade desks. Approval turns on the strength of your purchase orders, your trading history with the supplier, and the quality of the documentation, not primarily on a property charge.
Key Benefits
- A letter of credit removes the supplier's risk and yours, the supplier ships because payment is guaranteed by the bank, not by your promise
- Terms follow the goods cycle, 30 to 180 days per transaction, so you are not carrying a term loan for a working capital problem that resolves every 60 days
- Lenders assess the trade, not just your balance sheet, which matters if your company holds stock but has modest net assets
- Trade finance stacks with invoice finance: the trade facility covers the import leg, invoice finance covers the receivables leg, so you get end-to-end working capital without a revolving credit facility
Frequently Asked Questions
How does a letter of credit work?
The issuing bank (yours) gives the supplier's bank (the advising bank) a payment guarantee, conditional on the supplier presenting specific documents: bill of lading, commercial invoice, packing list, and any certificate of origin required. The supplier presents the documents, the banks verify them, and payment releases. You as the importer then owe your bank, not the overseas supplier. It removes counterparty risk from both sides of the transaction.
Can I finance purchases from UK suppliers too?
Trade finance is built around international trade and the document flows that come with cross-border shipping. For UK supplier payments, supply chain finance or stock finance is usually the better fit. If you are not sure which one applies to your situation, that is exactly the conversation to have before you approach a lender.
What documentation is needed?
For a typical transaction: purchase order, proforma invoice, agreed Incoterms, bill of lading or airway bill once goods ship, commercial invoice, packing list, and certificate of origin where required. The lender will specify their document checklist at the outset. Getting this wrong delays drawdown, so it is worth reviewing it against your supplier's standard paperwork before you commit.
How does trade finance differ from stock finance?
Trade finance covers the international purchase-to-delivery cycle, from paying the overseas supplier to receiving the goods. Stock finance covers domestically held inventory sitting in your warehouse. Many manufacturers use both: trade finance on the import leg, stock finance while the goods are held before sale. No broker can promise that both will be arranged with the same lender, but we structure it that way where the lender's appetite allows.
Related Funding Options
Invoice Finance for Manufacturers | Release Cash from Your Sales Ledger
UK manufacturers waiting 60-90 days for payment can release 80-90% of invoice value within 24 hours. We place invoice finance for manufacturing businesses across a range of facility sizes.
Stock Finance for Manufacturers
Stock finance for UK manufacturers: revolving facilities secured against raw materials, WIP, and finished goods to keep production running without waiting on customer payments.
Export Finance for UK Manufacturers
Export finance for UK manufacturing businesses: fund production before the buyer pays, protect against overseas default, and access UKEF guarantees. Talk to a broker who places these deals.
Trade Finance UK: Letters of Credit & PO Finance
Letters of credit, supplier finance and purchase-order funding for UK limited companies. We place trade finance with specialist trade desks, from £25k.
Business finance by location
Lender appetite varies by city and region. If you would rather start from where your business is based, these local guides cover the same funding with the local picture.
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Get matched with lendersCoreFi is a trading name of JG Core Ltd (Company #16218779, England & Wales). CoreFi acts as a commercial finance broker and does not provide regulated financial advice. All products described are unregulated business-to-business finance. Information on this page is for general guidance only and does not constitute a formal offer of finance. Terms, rates, and availability are subject to lender criteria and may change without notice.