Keep goods moving with trade finance

By Paul Fraser, UK sales director for specialist finance at Bibby Financial Services

In light of our latest market research and feedback from intermediary partners, Bibby Financial Services (BFS) has recently extended its trade finance offering to support a wider range of UK importing and exporting businesses.

Commercial trade invoice discounting appeals to businesses with a turnover of under £5m and with the ability to credit control in-house. BFS already offers invoice discounting on trade finance for corporate businesses with turnover in excess of £5m and the new measure will enable us to better meet the needs of commercial SMEs and intermediaries alike.

Data from the Office for National Statistics revealed that UK businesses increased their imports by £2.1bn in Q4 2017 (from non-EU countries). This increase was driven by businesses turning to the Far East to improve their supply chains which, in turn, is driving a crucial need for working capital to bridge the gap between paying suppliers and receiving customer payments. Our goal is to support commercial businesses that have the ability to manage their own credit control, but need the working capital to work across a more complex supply chain.

With trade finance, SMEs are able to benefit from the following:
• letters of credit provided within 24 hours to supplier banks, facilitating quick transactions
• suppliers are paid on the same day that goods are shipped and funding is available until end-customer payment is received
• access to a team of dedicated trade and currency specialists, providing a tailored and personal service.

In the current trade landscape, UK SMEs are increasingly looking to overseas markets for supply chain efficiencies and growth opportunities. According to our latest report of 500 established UK importers and exporters, almost two-thirds of importing SMEs (63%) trade with up to four countries, while a fifth (20%) trade with between five and nine different countries. By broadening their horizons, these businesses are seeking to grow by either importing and selling on goods or exporting their own goods to new markets.

In the world of international trade, importing is often seen as the poor relation. The country’s balance of trade targets is centred on boosting export output and, in the UK, selling goods and services overseas even has its own government-backed campaign (Exporting Is Great). In our view importing can also be great too, especially when it drives growth and jobs. Importing actually helps businesses to offer new products, increase competition, boost consumer choice and reduce manufacturing and production costs – and you can read our in-depth feature about importing in the upcoming April issue of the NACFB Magazine.

 

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