What Is Trade Finance? - A Guide for UK SMEs Looking to Scale

For small and medium-sized enterprises (SMEs), managing cash flow while meeting the demands of production, fulfilment, or global supply chains can be challenging. Trade finance is a vital solution for businesses looking to grow without the constraints of working capital shortages or liquidity bottlenecks. At Enness Global, we work with UK-based SMEs to structure tailored trade finance facilities. Our role is to source funding that supports ongoing trade activity, protects commercial relationships, and facilitates growth without putting pressure on cash flow or balance sheets.

What Is Trade Finance?

Trade finance refers to a suite of financial products that support trading goods and services, both domestically and internationally. These facilities are designed to fund the gap between placing an order and receiving payment from a buyer, allowing businesses to trade confidently without tying up working capital.

Typical trade finance products include:

• Purchase Order (PO) Finance – Funds to pay suppliers once a confirmed order is received
• Supply Chain Finance – Early payment to suppliers while extending buyer payment terms
• Export Finance – Working capital for exporting businesses
• Invoice Finance / Factoring – Advance funding against raised invoices
• Structured Trade Loans – Bespoke loans for large, time-sensitive or complex transactions

Each product is designed to support a specific stage of the trade cycle, sourcing, production, fulfilment, or payment, and helps businesses stay agile in fast-moving markets.

Why Trade Finance Matters for SMEs

Trade finance isn't just a cash injection; it's a strategic enabler. These facilities offer operational and financial advantages that allow businesses to grow, maintain control of their working capital, and confidently navigate complex commercial landscapes.

Key Benefits:

• Preserve Cash Flow - Secure the capital needed for large orders or long production cycles without depleting reserves.
• De-risk Transactions - Instruments like letters of credit and trade credit insurance protect against buyer default or supplier failure.
• Enhance Supplier Relationships - Accessing finance allows you to pay suppliers promptly or early, often unlocking favourable pricing or terms.
• Accelerate Growth - Confidently take on new contracts, fulfil bulk orders, or expand into new markets, knowing that finance is in place.
• Smooth Revenue Cycles - Use invoice or receivables finance to eliminate waiting periods between delivery and payment.

Trade finance enables SMEs to operate like larger competitors, navigating complex supply chains and international trade with the financial tools needed to scale efficiently.

Flexible Trade Finance Solutions

The broad trade finance market offers flexible, short-term facilities that can be adapted to your business model, sector, and growth stage. These facilities are useful for various purposes such as importing components, selling to overseas clients, or scaling your operations, a well-structured facility can release capital to:

• Purchase inventory or raw materials
• Fulfil confirmed orders
• Finance production
• Extend credit terms to customers
• Accelerate payment on outstanding invoices
• Support international supplier relationships

Facilities are usually structured over short terms, typically 1 to 12 months, and can be arranged on a revolving basis or per transaction. Many trade finance structures are self-liquidating, meaning the facility is repaid automatically when a buyer pays their invoice or goods are delivered.

How Trade Finance Is Priced

Trade finance facilities are typically priced monthly or as a fixed transaction fee, depending on the structure. Costs usually range from 0.4% to 1.8% per month.

Pricing depends on:

• The facility type
• Size and duration of the transaction
• Jurisdictions involved
• Risk profile of the buyer or supplier
• The credit standing of your business

Security or collateral may be required. This could include:

• A debenture over the business
• Assignment of receivables
• A charge over goods, stock or purchase orders
• Trade credit insurance
• Personal guarantees (in some instances)

Importantly, many lenders will focus on the strength of the underlying transaction rather than requiring long trading histories or significant fixed assets.

Who Is Eligible for Trade Finance?

At Enness, our trade finance solutions are available to businesses that meet two criteria:

Actively Trading – The business should be operational and revenue-generating.

UK-registered – We work exclusively with UK-registered businesses, although trading activity can be international.

We assist SMEs from a wide range of industries, including:

• Manufacturing
• Wholesale and retail
• Logistics and distribution
• Import/export
• Technology
• Consumer goods

We structure trade finance solutions that meet your commercial objectives such as fulfilling large contracts, managing seasonal demand or expanding into a new market.

How Enness Global Can Help

Trade finance is complex; each facility must carefully align with your business model and trade cycle. At Enness, we offer:

• Access to over 1000 lenders, including private banks, fintech, and specialist trade finance providers
• Fully bespoke structuring tailored to your cash flow requirements and commercial strategy
• End-to-end support, from initial structuring to liaising with lenders and supporting documentation

We work quickly and discreetly, ensuring funding is arranged efficiently and without disrupting ongoing operations. Our experience arranging complex financial solutions for entrepreneurs, SMEs, and HNW individuals means we understand how to move fast and think strategically.

Explore Your Trade Finance Options

If your business wants to fulfil larger orders, strengthen supplier relationships, or manage growth with greater confidence, trade finance can offer a powerful, flexible solution. Contact Enness Global to explore how we can structure the right facility for your business and unlock the capital needed to fuel your next growth stage.