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Often the need for additional working capital does not arise from the moment of invoicing, but much earlier in the supply chain. Especially when a supplier asks for an advance payment at the start of production. If there are insufficient funds to pre-finance this, purchase financing can offer a solution.
As an entrepreneur, it is nice to have a good cash flow to be able to purchase quickly and cheaply. If you are unable to pay your suppliers (in advance), trade or purchase finance can be the solution. With trade finance or purchase finance, the purchase value of the goods is fully or partially pre-financed.
Purchase financing gives you the space to purchase competitively and to achieve a margin advantage or discount. With trade finance you are also more flexible in absorbing fluctuating turnover and, for example, seasonal peaks. In addition, you can use the financing as capital to make more purchases and thus be able to grow. Finally, as an entrepreneur, you run less risk of non-payment because trade finance is based on the assumption that factoring is part of the whole finance solution.
Trade finance is based on the assumption that the trade finance, after delivery and invoicing to the end customer, is transferred into factoring.
The most important conditions for trade finance are:
Our partners in purchase financing offer liquidity to (international) small and medium-sized companies. They trade on all continents and offer tailor-made solutions to finance your entire supply chain.
Purchase finance or purchase order finance are forms of trade finance and are used to provide pre-shipment finance, often aimed specifically at a single buyer or supplier. Purchase finance is often used by trading companies that have suppliers and end customers. Financing is based on purchase orders that provide a financial injection to a growing company. This type of facility is sometimes used or not known to many companies and is often an investment alternative.
If you would like to know more about trade finance, please contact us or request a free quote.
Interested in trade finance? Request a quatation for supply chain finance now.
Do you have questions? Let our specialists advise you on a tailor-made basis!