This week in our SME funding series, we’re unpacking Trade Finance, a smart solution that helps you pay your suppliers (local or international) when you don’t have the cash upfront. Whether you're sourcing stock from a local manufacturer or importing materials from abroad, trade finance gives your business the ability to fulfil large orders, manage cash flow, and grow with confidence.
How It Works (in simple steps):
You receive a confirmed purchase order from a customer.
Apply for trade finance using your customer’s PO and your supplier quote.
The funder pays your supplier directly (local or international).
Goods are delivered to you or your customer.
You repay the funder once your customer pays (usually a 3 month term).
Why It Works:
Enables you to buy goods - locally or globally - before you’ve been paid by your customers.
Lets you take on bigger opportunities without straining your capital.
Some providers offer payment guarantees or letters of credit to reassure suppliers.
Being able to pay suppliers on time builds trust and reliability.
Real-World Example: A Cape Town-based food distributor secured a large supply contract with a national supermarket chain. Their local farming suppliers needed payment upfront, but the supermarket would only pay 30 days after delivery. Using trade finance, the distributor paid the farms immediately, delivered on time, and repaid the lender once the supermarket paid. No delays, no strained cash flow, no missed opportunity.
Key Takeaway: Trade Finance isn’t just for global deals, it’s a powerful funding tool for local supply chains too. If you’ve ever had to turn down a big order due to cash flow constraints, this could be the solution your business needs.
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