Consider it the ace up your sleeve. If you’re a manufacturer, distributor or a company buying goods internationally, using trade payable financing for inventory or other purchases can help you conserve cash and streamline the process.
This unique financing method works by having your bank pay your supplier directly or reimburse you for payments you have already made.
In short, trade payable financing can ease cash flow issues by financing a purchase over a longer period or at a more generous advance rate. Here’s a handy guide on how the trade payable program works:
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Your bank pre-pays your supplier directly on your behalf.Or you can be reimbursed for payments already made to your supplier or if transport documents are less than 60 days old. In either case, you don't have to deplete your cash reserves. |
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Transactions can cover domestic or foreign purchases.Use trade payable financing for manufacturing or immediately reselling to buyers in the U.S. or abroad. Eligible transactions include letters of credit, documentary collections or open account terms. Finance the payment of payables due to one supplier or multiple sellers. |
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Begin financing as soon as you take title to the goods.Ineligible purchases are those from affiliates, subsidiaries and other entities under the same ownership as your firm. |
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Make it a win-win.Your supplier avoids the risk of nonpayment while you enjoy financing benefits and the ability to take advantage of suppliers’ early payment discount offers. |
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Prepare for sales to take off.Ease your way by having transaction documents ready from your trade payable finance line of credit, including a transport document such as a bill of lading, invoice, and instructions and certifications for each transaction. Additional documents may be required but being prepared and organized can speed up the financing process. |
Ready to take things global? Grow your business with trades payable financing to reap a world of advantages. An International Trade Finance Specialist can help. [cite::171::cite] [cite::172::cite]