Trade Financing
Also known as: Trade finance
Trade financing is the range of financial products that help businesses fund the gap between buying goods and getting paid, easing cash flow across the supply chain.
Trade financing includes instruments such as trade credit, invoice financing, letters of credit and supply-chain finance. All address the same challenge: businesses often must pay for goods well before they receive payment from their own customers, creating a cash-flow gap that financing bridges.
For B2B buyers, accessible trade financing means being able to purchase what the business needs without straining cash. Marketplaces increasingly embed financing — offering approved buyers credit terms across their purchases so financing and buying happen in one place.
Frequently asked questions
- What is trade financing?
- Trade financing is the set of financial products — trade credit, invoice financing, letters of credit, supply-chain finance — that fund the gap between paying for goods and getting paid for them.
- How does trade financing help buyers?
- It lets businesses buy what they need without tying up cash, bridging the gap until their own revenue arrives and supporting growth.
Related terms
Trade Credit
Trade credit is the financing a supplier extends to a buyer by allowing payment after delivery, enabling the buyer to obtain goods before paying for them.
Read definitionCredit Terms
Credit terms are the conditions under which a supplier allows a buyer to pay for goods after delivery, rather than upfront — for example, payment within 30 days.
Read definitionWorking Capital
Working capital is the money a business has available for day-to-day operations, calculated as current assets minus current liabilities.
Read definitionGo deeper
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