What is a Trade Finance Loan?

A trade finance loan is a short-term borrowing facility specifically designed to support businesses in managing the financial requirements of international trade transactions. These loans provide the necessary funds to cover the costs of importing or exporting goods, bridging the gap between the payment to suppliers and the receipt of funds from customers. 

Trade finance loans are typically revolving credit facilities, allowing businesses to draw funds as needed based on their trade activities. They help improve cash flow by financing inventory purchases, fulfilling orders, and covering related costs. The facility often requires documentation such as invoices and transport documents and may involve varying levels of control by the lender over these documents.