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Trade Finance. What is it and how does it work?

Trade Finance. What is it and how does it work? These are 2 two important questions, and their answers may be the key to unlocking your business’ next stage of growth. If you have ever turned away business because you could not afford to fund it. Or received a Purchase Order from a customer but did not have the cash flow to pay the manufacturer. Or have a debtor’s ledger, then trade finance may be for you.

Before we jump into how it all works, understanding where a trade facility fit in the picture is critical. Trade finance can be broken into 3 categories: import, export, and invoice finance. Each has their own benefits and operate in different circumstances. You may find that a combination of the 3 could be the solution for unlocking your businesses cash flow.

Import Finance

If your business imports stock or manufactures products offshore, import finance may be for you. Let us jump into how an import facility works…

  • Place an order with your overseas supplier

  • You receive the supplier invoice and forward it to the Matias Group

  • We work directly with the funder to approve payment of the invoice

  • Once approved, the invoice will be paid typically within 24 hours

  • You receive the goods and make payments on the agreed terms

  • Oh, and if cashflow is still restricted and you have received the goods we can put in place an invoice facility

Export Finance

If your business manufactures or sells products to overseas clients, integrating an export facility means unlocking cash before the order is shipped. Let us look at the process…

  • Your business receives an order from a customer

  • You forward the purchase order to the Matias Group

  • We work directly with the lenders to provide you the finance needed to manufacture the goods

  • The goods are shipped

  • The customer pays you for the goods based on your terms

  • You make payments when you receive funds

Invoice Finance

If you have a debtor’s ledger, invoice finance enables you to turn your outstanding invoices into cash, usually within 24 hours! The process is easy, take a look…

  • You connect your accounting/invoice software, and our lending experts can advise the maximum amount we can unlock, OR you can choose the invoices you want to be funded

  • We verify your debtor’s business details

  • Once the invoices are approved, access up to 90% of the value within 24 hours

  • The balance outstanding is paid to you as your clients pay their invoices minus the agreed fees

There you have it! An overview of all the aspects of trade finance and how it can benefit your business. If you want to learn more or are unsure what invoices or purchase orders can be paid, simply reach out to one of our lending specialists, we would be happy to assist.


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