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Trade Finance UK | A full guide

Trade finance covers all trade purchases including exports. For the sake of this article, we are going to use the way that the industry would categorise Trade Finance which would be for the funding of purchases of goods or services.

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Why use trade finance in the UK?

The UK is an importing country, we currently spend 27% of our GDP on bringing goods into the country every year. With such a large flow of capital leaving the country to pay for purchases businesses look to relieve the financial burden by using Trade Finance.

Trade finance helps to cover your cash flow gap between the time that you pay for a product and when you receive payment from your customers. Whilst not all businesses use this for every purchase a lot do use it for specific imports to help plug the gap.

Dealing abroad can come with risks like non-receipt of products, quality of products not being sufficient and a whole lot more. With trade financing, you have increased protection over your purchases which we go into detail here.

What products are offered for trade finance in the UK?

With the need for financing so large banks and non-bank providers alike have created a range of products for servicing the sector. Whilst not every finance facility will be appropriate for your business there will likely be one that is the right fit.

See below the product options (not limited to) that are currently available from multiple financial institutions in the UK:

  • Purchase Order Finance

  • Invoice finance

  • Letter of credit

  • Revolving trade finance credit line

  • Loans

Each product aims to serve your business needs in its own way, click on any product above to find out more.

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Trade Finance Providers in the UK

There are two options when looking for a trade finance provider in the UK, either you will get the funding from a bank or a non-bank financier. It used to be the case that only banks offered these products but that has since changed with large financial service companies stepping in to help where the banks can not.

Banks normally are the cheapest forms of Trade Finance, they can see the funds that your business have in their accounts and therefore feel more safe lending to you. Whilst normally cheaper they are becoming increasingly harder to get lending from.

Throughout the years since the last financial crisis banks have come under increasing regulatory pressure, which has put a strain on their willingness to lend.

Now there are a large number of Non-bank trade finance companies seeking to serve where the banks can not. They range in size but usually have heavy funding either from the banks themselves, hedge funds or investors.

These non-bank financiers have created trade finance products that tend to be more accessible to SME’s. Whilst they might ask for security against the facility they grant you this is not the case with all providers, now unsecured Trade Finance is available to businesses with positive net assets of over £300,000.

We work with a big portion of the trade financiers in the UK market and can help your business find the right solution.

Protection of using Trade Finance

One of the main allures of using Trade Finance for your business in the UK is the increased protection that you get with the finance facility.

With a lot of the above products, we mentioned companies will do their checks on your supplier to make sure that ultimately they are going to be paid back. This includes credit checks, Director and People with significant control checks and a lot more.

We have a comprehensive guide on Trade Finance here where we look further into the increased security you get whilst using this form of funding.

How to choose the right Trade Finance partner

With a lot of variables in play when you come to finding the right financier this purely depends on the financial health of your business and what stage of growth you are at.

The first step would be establishing which product you think would be right for you. There can sometimes be multiple products that would work for you, if you need help on this get in contact with us here.

Whilst pricing is commonly the deciding factor when choosing a financing facility there are other factors that you should take into account. Often with Trade Finance, there are extra fees hidden inside exchange rates when you are using the financing to pay overseas, to see how to help manage these costs read our article here.

Like many other industries, we suggest that you look at multiple options when finding any source of funding. The likelihood is several companies can facilitate your needs but one might offer better pricing or better service.

This is where we are different to other finance brokers, we show you what is on offer to you and your business on the market. We don’t just show you one path, we give you a range of offerings and let you decide because ultimately we know finance but you know your business best.


The Trade Finance landscape in the UK is vast with different providers and products to choose from. If you would like to look further into Trade Finance we look extensively into the topic here.

As always, the Funding Routes team are more than happy to help with any financing needs. Our contact details are here.

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