Trade finance
Up to $5,000,000+ for the right business. Funds the gap between paying a supplier and getting paid yourself, domestic or international, with minimal paperwork under $250,000.
Trade finance funds the gap between paying a supplier and getting paid by your own customer, covering the purchase of stock or equipment before it’s sold or put to work. It’s secured by the transaction itself, not property, and it works whether you’re buying from overseas or from another Australian business.
Most trade finance is used domestically, funding a purchase from another Australian supplier, not just overseas shipments. Overseas purchases are absolutely possible too, with the right lender and structure.
What are the main types of trade finance?
The core instruments are a letter of credit (a bank guarantee that payment reaches your supplier once shipping documents are verified), a pre-shipment or import loan (funds advanced to purchase stock or equipment before it’s sold), and supply chain finance (a third party pays your supplier early on your behalf). Which one fits depends on whether you’re buying, selling, domestic or international.
- 01Trade finance works for domestic and international purchases alike, it isn’t only for overseas import and export.
- 02You can use it to purchase equipment overseas, then refinance it onto a traditional asset finance product once it lands in Australia.
- 03Facilities up to $250,000 can often be approved on minimal documentation, business bank statements and basic identifying information. Above that, expect to provide full financials and potentially more security.
- 04Limits can reach $5,000,000 or more for the right business, though most facilities run to a maximum term of 90 to 120 days.
Is trade finance risky?
Treated properly, trade finance is a cash-flow timing tool, not a gamble, it’s secured by the specific transaction, and reputable lenders structure it to reduce risk on both sides rather than add to it. Where it gets risky is mismatching the facility to your actual cash cycle: if you expect to be paid back in more than 90 to 120 days, a trade finance facility with a shorter maximum term isn’t the right tool, and a business overdraft is usually a better fit for that longer runway.
Equally, some lenders will restrict what you can use the funds for or expect you to run exclusively with them, read the terms before you sign, the same as with any working capital facility.
How much can you access, and what documentation do you need?
Facilities on our panel run up to $5,000,000 or more for the right business. Below $250,000, many lenders will approve trade finance on alt-doc terms, your business bank statements and basic identifying information, without a full financial pack. Above $250,000, expect to provide complete financials, and potentially more security depending on the amount requested. Our trade finance calculator lets you estimate the cost of a facility before you apply.
| Facility limit | Up to $5,000,000+ for the right business |
| Term | Typically 90 to 120 days maximum, not suited to longer cash cycles |
| Documentation | Alt-doc (bank statements + ID) up to $250,000; full financials above that |
| Scope | Typically domestic; overseas purchases achievable with the right lender |
Most trade finance facilities run to a maximum term of 90 to 120 days. If your cash cycle typically runs longer than that, a business overdraft is usually the better-fitting product.
What’s the difference between trade finance and invoice finance?
Trade finance funds the purchase side (paying a supplier for stock or equipment before it’s sold. Invoice finance funds the sales side), releasing cash against invoices you’ve already issued to your own customers. Used together, they cover both ends of the same cash-flow gap: trade finance gets the stock in the door, invoice finance gets the cash out once it’s sold.
Not every business needs both, but for the right trading pattern (buy stock on trade finance, sell it, then draw against the resulting invoice), the combination closes the entire working capital cycle rather than just one half of it.
Two things people get wrong about trade finance
It’s normally domestic, not just overseas
Most trade finance funds a purchase from another Australian supplier, not an overseas shipment. Buying from overseas is absolutely achievable too, it just takes the right lender and structure, like a letter of credit.
Overseas equipment doesn’t have to stay on trade finance
Buy equipment overseas on a trade finance facility, and once it lands in Australia you can often refinance it onto a traditional asset finance product, a cleaner, longer-term structure than leaving it on a short-term facility.
How do you actually get a letter of credit?
A letter of credit is arranged through your lender before you place the order, it’s a bank guarantee that your supplier gets paid once they’ve verified the shipping documents, which gives an overseas supplier confidence to ship without payment upfront. It’s one of several trade finance instruments, and not every purchase needs one; simpler domestic transactions are often funded with a straightforward pre-shipment loan instead.
Ecommerce Loans is a finance broker, not a lender. Rates and figures shown are indicative only and subject to individual lender assessment.
When is trade finance not the right call?
If your cash cycle (from paying a supplier to getting paid yourself), typically runs longer than 90 to 120 days, most trade finance facilities won’t fit; a business overdraft is usually the better tool for that longer runway. It’s also not the right call for a purchase that doesn’t have a clear, short-term sale or use cycle behind it, since the facility is built around that gap closing within its term.
If either of those sounds like your situation, say so on the call. Redirecting you to the right product costs us nothing and saves you a facility that doesn’t fit.
Compare this against
Not sure trade finance is the right shape?
Is the gap on the selling side, waiting to get paid, not buying stock?
Invoice finance advances against invoices you’ve already issued, the mirror image of funding a purchase.
See Invoice finance →Buying equipment rather than stock or inventory?
Asset finance is built around a specific piece of equipment, not a supplier purchase.
See Asset finance →Want general working capital, not funding tied to one transaction?
An unsecured loan isn’t linked to a specific purchase or shipment.
See Unsecured business loans →How do you actually get trade finance?
Tell us the basics (what you’re buying, roughly how much, and your ABN), and if you’re under $250,000 we can often move on bank statements and basic ID alone, no formal application or credit check at that stage. We flag the term length and documentation requirements on the shortlist before you apply, not after.
Want the numbers first? Try the trade finance calculator →
Run a wholesale or trade business? See how the facilities work together →
New to working with a broker? See how a business loan broker works →
Give us the basics below and Andrew will come back with the two or three offers actually worth your time, usually within a business day.