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International trade has been in existence for centuries, dating all the way back to the development of ancient Mesopotamia. The trading of invoices helped fund the expansion of the British empire, ignite the industrial revolution, and so much more. Trade finance simply facilities the advancement of the evolution of global trade.
For a very long time, before trade finance was called trade finance, banks conducted trade transactions by lending money to suppliers to fund the purchase of goods and services. In most cases, the supplier was unable and unexpectant to complete repayment until the final product or service was sold and purchased by the end customers. This process could take up to several weeks or even months depending on the line of business, state of the economy, etc.
Say a merchant who sold metals sold to an engineer who was unable to repay the merchant until the final product was produced, manufactured, and sold to the end customer. In most cases, the merchant would sell the invoice to the bank or an alternative lending institution instead of waiting on repayment. The bank would then receive full payment from the engineer later on and in turn, the merchant would receive an upfront payment for less value for their product.
Today, suppliers have access to unique supply chain finance solutions that enable on time payments. Instead of waiting for payment by the time the final product is produced, manufactured, and sold, a merchant can access a revolving credit line facility from TradeRiver to transact seamlessly and receive an accelerated payment of up to 90% of the invoice within just 24 hours.
Today's trade finance simply makes it easier for buyers and sellers, importers and exporters to transact through trade.
"Some 80 to 90 percent of world trade relies on trade finance..." – World Trade Organization (WTO)
With a trade finance revolving credit facility, funds are readily available. Revolving lines of credit are particularly beneficial for companies that experience sales fluctuations and have elements of seasonality in their business. Not to mention in today's political and economic climate, where uncertainty is the only certainty. If your business experiences high and low sales seasons, a cash flow gap generally surfaces. A revolving credit line bridges that gap or simply bridges cash flow gaps for businesses navigating these unprecedented times.
Our clients come from a wide array of industries and they each benefit from specially tailored supply chain finance solutions that enable them each to keep their supply chain moving and their business growing no matter what external, trending disruption. From home pizza ovens to pharmaceutical distribution to bricklaying and scaffolding, our clients each have unique demands and needs for their supply chain and use TradeRiver's supply chain finance program to protect their supply chains, unlock peace of mind and access a safety net to prevent cash flow bottlenecks.
Without supply chain finance solutions, companies face financial risk and hardship. In today's volatile global trade landscape nothing is certain. Companies are more inclined to fall behind on payment obligations for reasons beyond their control. Prolonged late payments can have a debilitating long-term impact on companies and stakeholder relationships. At TradeRiver, we provide a suite of solutions like revolving trade credit facilities and accounts receivable factoring which can not only help companies to merely fund cross-border transactions, but it can help during these uncertain times to free up cash flow and keep business afloat.
For more information on our supply chain finance solutions, please contact info@traderiverfinance.com!