If you run an import or export business in Australia, managing cash flow across borders is often one of the biggest challenges. Overseas suppliers usually want upfront payment, but your customers at home may not pay for 30, 60, or even 90 days. That’s where trade finance comes in.
Trade finance helps bridge the funding gap between paying your suppliers and receiving payment from your customers. In this guide, we’ll break down how it works, who it’s for, and how it can support your business growth.
Table of Contents
- What Is Trade Finance?
- How Does Trade Finance Work?
- Who Should Use Trade Finance?
- Types of Trade Finance Available
- Benefits of Trade Finance for Cash Flow
- How to Access Trade Finance in Australia
What Is Trade Finance?
Trade finance is a type of business finance that supports importers and exporters in managing the costs and risks associated with international trade. It provides working capital to help you pay suppliers upfront, without tying up your own cash.
It’s commonly used for:
- Importing goods from overseas manufacturers
- Exporting products to international clients
- Bridging cash flow gaps between purchase and payment
In short, it helps you fund transactions that happen across different currencies, time zones, and payment terms.
How Does Trade Finance Work?
Here’s a simplified example:
- You place an order with an overseas supplier.
- A trade finance lender pays the supplier on your behalf (either in full or as a deposit).
- Your goods are shipped, and you receive them.
- You repay the lender once your goods are delivered or sold — often within 30 to 90 days.
This gives you time to generate revenue before needing to outlay cash, making it easier to manage working capital.
Who Should Use Trade Finance?
Trade finance is ideal for businesses that:
- Import goods and need to pay suppliers before receiving the product
- Export goods but face delays in receiving payments from overseas buyers
- Want to take on larger orders without straining cash reserves
- Experience seasonal fluctuations in demand or revenue
- Are growing quickly and need flexible, transaction-based funding
Whether you’re importing electronics, raw materials, textiles or machinery, trade finance can help smooth out your cash flow and keep your supply chain moving.
Types of Trade Finance Available
There are several trade finance options in Australia. The best one for your business depends on your supply chain, payment terms, and financing needs.
1. Import Finance
Covers the cost of purchasing goods from overseas. Lenders pay suppliers directly and are repaid by you once the goods arrive or are sold.
2. Export Finance
Gives you access to funds based on confirmed export orders or invoices. This helps exporters cover production costs while waiting for overseas clients to pay.
3. Trade Credit / Supplier Payment Finance
Extends your payment terms with overseas suppliers, allowing you to pay in 30–180 days instead of upfront.
4. Letters of Credit
A letter issued by your bank guaranteeing payment to your supplier, often used in more complex or high-value transactions.
5. Invoice Finance (Factoring)
Allows exporters to access a portion of funds from unpaid overseas invoices — reducing the payment lag from buyers.
Benefits of Trade Finance for Cash Flow
Using trade finance strategically can unlock several advantages:
- ✅ Protect working capital by avoiding large upfront payments
- ✅ Negotiate better deals with overseas suppliers (e.g. early payment discounts)
- ✅ Fund growth by taking on bigger orders or new markets
- ✅ Improve cash flow predictability with structured repayments
- ✅ Reduce risk through tools like letters of credit or export insurance
Trade finance is especially valuable when exchange rates fluctuate or when delays in international shipping create unexpected gaps in your payment cycle.
How to Access Trade Finance in Australia
Trade finance is available through banks, specialist lenders, and finance brokers. Traditional banks may have stricter requirements, while non-bank lenders and brokers like Capital Plus Finance offer more flexible options — especially for small to medium-sized businesses.
Here’s how to get started:
- Review your trade cycle – Understand when cash leaves and returns to your business.
- Gather documentation – Including purchase orders, invoices, shipping terms, and supplier details.
- Speak to a finance broker – A broker can compare multiple lenders and help you choose a solution that fits your timeline, cash flow, and industry.
Need Help Navigating Trade Finance?
At Capital Plus Finance, we help importers and exporters across Australia secure the right funding for their international supply chain. Whether you’re looking to improve cash flow, manage supplier payments, or grow into new markets, we can connect you with flexible, lender-matched trade finance solutions.
👉 Contact Capital Plus Finance today to learn how trade finance can support your business operations and free up your working capital.
About Capital Plus Finance
Capital Plus Finance is a Sydney-based equipment finance broker and business lending expert. We work with SMEs across Australia, providing access to over 40 lenders and a wide range of solutions — from trade finance to cash flow loans and equipment leasing. Learn more at capitalplusfinance.com.au.
