Any and every business owner wants to make as much money as possible – nothing controversial or debatable here. This sometimes mean we get a new product out there, perhaps a new type of service. Maybe we are expanding our business, either hitting new markets or even going international. However, sometimes repayment terms, collateral obligations, and risk thresholds simply make such a thing rather difficult. A business might simply lack the capital to expand properly, to the degree you wish.
However, trade finance can help companies generate even more growth. This can allow them to spread, to overcome challenges, and to undertake ventures that they wouldn’t be able to take on earlier. Below you can find the benefits trade finances has for your business in more detail.
It serves as a support system
Trade finances can support any company that wishes to go international. Namely, trade financiers are there to help you out. They serve as intermediaries, they assist with your dealings abroad, help with supplies, logistics, and transportation.
Trade finance lets firms become more flexible. Financiers form this field establish direct credit lines with importers, they give you access to credit that will help you do transactions abroad, as well as offering some kind of solution and system for monitoring credit and tracking payments.
Indeed, trade finance is all about flexibility, it gives you flexibility for paying in different currencies, for example, which can give you extra discounts and options from international firms and suppliers. However, they also limit the risk and cost that always follows currency exchanges.
Then, you can also get lengthened terms of repayment. This means that any importer who simply cannot do what he or she wants because of any cash flow issues can actually negotiate some competitive terms with suppliers. In other words – trade finance gives you some leverage, you get some ground to stand on and make beneficial deals internationally.
A very clear and perhaps core benefit of trade finance is that it gives a company the best possible opportunity to create and realise profits. Now, when it’s set up as a loan, trade finance allows some investment in a business, but still doesn’t require its owner to offer equity. A good trade finance deal gives you control over your situation and your business ventures.
Namely, a trade financier will assess the profitability of whatever venture you propose. They do this based on their years of experience in international trade, assessing your situation, the possible risk and success rate, as well as, of course, profitability of the entire venture. They do not create any constrictions in terms of equity financing, nor do they require serious collateral obligations that you need when trying to get regular property or investment loans.
When you hire a good company, like Classic Funding Group, for example, you get to a flexible way to capitalize on any opportunities you think are out there for your business. You get the power to negotiate better terms, allowing you to grow and expand at a pace much faster than you would have expected, or found possible, before.
Better management of your money
Experienced trade financiers use trade finance to get better cash flow management even if they don’t actually need the money or help. It’s just too convenient to pass up. Namely, you basically ensure that every order is paid upfront, and so you can also keep in mind that suppliers are also going to get paid when they need to get paid. You essentially pay them on your own terms, you take control over your finances, and so you can rest easy knowing that no icky surprises or dramatic events will take place without your knowledge.
Since we all know that cash flow issues can escalate the movement your back is turned, any assistance and help with this process can be a lifesaver.
No more FOMO
Good trade finance deals mean you won’t have to deal with the fear of missing out (FOMO) ever again. Namely, is there anything worse than seeing an amazing business opportunity emerge right in front of your very eyes, only to force yourself to let it go because you just can’t handle it right now? Well, trade finance can help you with this problem. Even if you don’t have the money in your bank account, you can use trade finance to get things off the ground.
Furthermore, you should know that you also don’t have to wait for your credit score to improve. Trade finance does not require your credit score record, and you don’t have to offer any assets as security. It is basically based on your immediate next deal, and so if you have a business, you can fund the deal. Furthermore, it also doesn’t make getting the next trade finance deal harder if you already have on onboard. If the financiers see that you run a good company, that you operate properly, you can be pretty certain you will get what you need.
Trade financing benefits a business in many ways, but all of them basically boil to one single aspect – flexibility. Whether you have money in the account or not, a trade finance deal can help you branch out and not miss out on a specific opportunity. You also get help and assistance with doing business abroad that you simply wouldn’t be able to do on your own. A good trade financier can open many doors for you.
Latest posts by Lucas H. Parker (see all)
- What is Trade Finance and How it Benefits a Startup Business? - October 9, 2019