Trade Finance for Manufacturers
Manufacturers buying raw materials or components from overseas suppliers often need to pay upfront or on shipment — months before the finished goods are sold and paid for. Trade finance bridges this gap by paying your supplier directly, giving you time to manufacture and sell before repaying.
Letters of credit, supplier payment guarantees, and import finance all fall under the trade finance umbrella. These instruments are designed to give both you and your overseas supplier confidence in the transaction.
Key Benefits
- Pay suppliers upfront without draining working capital
- Letters of credit give overseas suppliers payment confidence
- Finance follows the goods — from purchase order to payment
- Combine with invoice finance for complete working capital cover
Frequently Asked Questions
How does a letter of credit work?
Your bank (the issuing bank) guarantees payment to the supplier's bank (the advising bank) upon presentation of specified documents (bill of lading, commercial invoice, packing list). This gives the supplier confidence to ship the goods.
Can I finance purchases from UK suppliers too?
Trade finance is primarily designed for international trade. For UK supplier payments, invoice finance, stock finance, or supply chain finance may be more appropriate.
What documentation is needed?
Typically: purchase order, proforma invoice, shipping terms (Incoterms), bill of lading or airway bill, commercial invoice, packing list, and certificate of origin if required.
How does it differ from stock finance?
Trade finance covers the international purchase-to-delivery cycle. Stock finance covers domestically held inventory. Many businesses use both — trade finance for importing, stock finance for warehousing.
Related Funding Options
Invoice Finance for Manufacturers
Release cash from trade invoices to fund raw materials, production, and growth. Invoice finance designed for UK manufacturing businesses.
Stock Finance for Manufacturers
Fund raw materials, work-in-progress, and finished goods inventory. Stock finance for UK manufacturing businesses.
Export Finance for Manufacturers
Fund export orders and manage overseas buyer risk. Export finance for UK manufacturing businesses with UKEF support.
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Learn About Our Broker NetworkCoreFi 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.