Trade finance
Fund supplier orders and manage cash flow gaps with tailored trade finance solutions. Compare 120+ UK lenders with expert help from Funding Options by Tide.
What is trade finance?
Trade finance helps businesses manage cash flow and reduce risk in domestic or international trade. It covers stock, raw materials, or goods purchases to keep your supply chain moving, even with delayed customer payments.
How does trade finance work?
Trade finance typically involves a lender advancing funds to pay suppliers upfront. With purchase order finance, funding is provided once a confirmed purchase order is in place. In supplier finance, the lender pays your supplier directly, and you repay at a later date. Invoice finance allows you to unlock cash tied up in unpaid invoices after goods have been shipped. Repayment usually comes from the final sale of goods, offering a cash flow buffer as your trade cycle completes.
Who is trade finance for?
Trade finance is ideal for UK SMEs that:
Import or export goods
Need to pay suppliers before receiving customer payments
Face seasonal demand or long trade cycles
Operate in manufacturing, retail, or wholesale sectors
Whether you’re scaling up or managing larger orders, trade finance gives you the flexibility to act without waiting for cash flow to catch up.
How does Funding Options work?
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Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 120 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
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Access a wide range of trusted lenders: from high street banks to alternative finance providers.
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Get real-time matches based on your business profile and funding needs.
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Advantages of trade finance
Bridge payment gaps
Avoid delays between paying your suppliers and receiving income from customers.
Increase purchasing power
Access the funds needed to take on larger orders or negotiate better supplier terms.
Support international trade
Manage risk, currency exposure, and cash flow when dealing with overseas suppliers and buyers.
Trade finance with invoice finance
First cash flow problem
As seen in the example above, businesses like Joe's can have two cashflow problems. The first cash flow problem is the delay between paying suppliers and receiving stock, and the other is the delay between shipping goods to your customers and getting paid via invoice.
Two solutions
Trade finance is designed to solve the first of those two issues — and invoice finance can solve the second.
Payment delay
If it takes two weeks for your goods to arrive from the supplier, two weeks to get them to the customer, and then your customer pays you on 30-day terms, you'll be out of pocket for two months before being paid. Trade finance takes the supplier payment delay out of the equation, but you'll still have to wait to get paid by your customer.
Invoice finance
With invoice finance in place, you'll get most of the invoice value as soon as you invoice your customer — so you can repay the trade finance lender earlier. You could get trade and invoice finance with separate lenders or package it into one with the same lender for simplicity.
Standalone trade finance
But it's important to note that you don't have to have invoice finance — you can have standalone trade finance if that's a better fit for your business.
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
Learn more about trade finance
Trade finance vs supply chain finance
Trade finance is sometimes confused with supply chain finance, and it's an easy mistake because trade finance helps you fund the beginning of your supply chain. However, supply chain finance is a different type of business lending that buyers offer to their suppliers and doesn't apply here.
Companies and providers
Many firms are operating in trade finance, however, generally, the mainstream banks such as HSBC and Barclays will only work with well-established businesses with turnover in the £millions, so they're not an option for smaller firms. These larger lenders, including large independents like Bibby, will only offer trade finance when combined with invoice finance.
However, many smaller lenders also offer trade finance, invoice finance, or a combination, including Woodsford Tradebridge, Aldermore and Ultimate Finance. With these providers, you may have the option to choose whether or not you'd like invoice finance included.
There are also a few specialist lenders that only offer standalone trade finance. This category includes companies like Goldcrest and Senaca.
If you're looking for the right trade finance lender for your situation, make an application or get in touch, and we'll help you find the best option quickly.
Eligibility and criteria
There are two key questions to ask to find out if trade finance is right for your business:
Have you got a purchase order you need to fund?
Do you want to import or export products for resale?
If the answer to these questions is yes, trade finance could help you grow your business. And trade financiers aren't as concerned about what's on your balance sheet as mainstream lenders — what they want to know is: "what's the transaction, how much will it grow your business, and who else is involved?"
Trade finance is generally for companies with good supply chains and end-buyers but doesn't have the working capital to go it alone.
Interest rates
The interest rates for trade finance are usually between 1.25% and 3% per 30 days. Generally speaking, the larger the order, the lower the rate you'll pay. The cost of finance will also depend on the supplier and buyer you're working with because they affect the chances of something going wrong.
Another factor that affects the cost of trade finance is credit protection. Credit protection means the lender will be liable for the loss your customer doesn't pay, which adds to the price because of the additional risk. However, some businesses will find this extra cost worth it for the added peace of mind.
Finally, it's worth remembering that having invoice finance alongside trade finance may add to the overall cost — so although it's a good option for some businesses, it's not necessarily the right option for everyone.
What is trade finance in simple terms?
Trade finance helps businesses pay suppliers and cover costs while waiting for payment from customers ; especially useful for importers and exporters.
Can I use trade finance for domestic trade?
Yes. While commonly used for international trade, trade finance is also available for UK-based supply chains.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Joe Morley
Head of Unsecured Lending
Joe has worked in the alternative lending space since 2015. During this time he has helped hundreds of SMEs access millions in essential funding ranging from long-term asset-backed lending to short-term unsecured revolving credit lines and beyond. In his role, Joe manages and supports a large team of Credit Finance specialists.