The lending barrier
Consider a growing importer whose supplier requires payment before shipping. Cash is committed while goods are in transit and held as stock, and business customers pay after delivery. A larger order may be profitable on paper but tie up the cash needed to pay the next supplier.
How we approached it
In this example, we map the full cycle from supplier payment through shipping, stock turnover and customer collection. We review purchase orders, supplier terms, margins, existing facilities and currency exposure. The proposed trade facility is assessed against that cycle, including what happens if shipping or sales take longer than expected, rather than choosing a limit based on order value alone.
The outcome
A suitable facility would allow the supplier payment to be funded while preserving operating cash, with repayment planned from sales proceeds. Availability, drawdown conditions and repayment dates must fit the transaction. This is a proposed structure, not an example of an approved facility.
What this means for borrowers
Trade finance works best when there is a clear path from funded purchases to collected sales. The useful questions are how long cash is tied up, what evidence supports the trade and whether the repayment deadline still works if the cycle slows.
This is an illustrative scenario comparable to deals we have handled for our clients. Figures and outcomes are examples; lending remains subject to individual assessment.