Trade Finance Partners Limited

TFP is a provider of true trade finance to predominately UK based small and medium sized companies that have confirmed purchase orders for finished goods from credit worthy end customers.

These goods can be imported or exported from or into most countries around the world.

TFP does not lend money it physically buys and sells the goods for which its client has a confirmed purchase order. In this way TFP’s client is able to fund its supply chain on a transaction by transaction basis.

Supplier payments of between £100,000 and £1,000,000 can typically be made against confirmed purchase orders.

Where traditional sources of trade finance are unavailable TFP could make the difference.

How can trade finance benefit today's businesses and entrepreneurs?

It is essential to understand what true trade finance is and what it is not.

Mainstream bank lenders or invoice discounters will often seek to offer a business, what they describe as trade finance. However this is only in effect an attempt to lend based on security and in particular the balance sheet strength of the borrower.

True trade finance is not lending hence it does not seek to secure its position on the businesses balance sheet; it seeks its security and hence takes true risk, through ownership of goods by funding the supply chain in its entirety.

A true trade finance business will purchase goods on behalf of its client against a confirmed purchase order. It will fund the gap between paying for the goods that have been ordered and the receipt of the payment from the end buyer; typically this will be between 70 and 90 days. Often these goods will be finished goods originating from the Far East to being delivered into Europe.

For businesses that have won orders but don’t have ability to fund orders trade finance can be the answer that allows the supply chain to be funded and the order fulfilled.

What type of goods can be funded this way?

Traditional trade finance works for certain types of trades:

• Finished goods
• Simple gross margin in excess of 17.5%
• Client will need to contribute at least 10% of the supplier invoice by way of advance payment; this their “skin in the game” to align their interests with the financier
• Solid end customer; the end customer needs to be credit worthy or buying using a bank guarantee such as a letter of credit
• Typically minimum order sizes apply often supplier invoices need to be $100,000 or more