What is Trade Finance?

Trade finance is a broad term encompassing the financial instruments and products used to facilitate international trade and commerce. Trade finance mitigates the risks associated with cross-border transactions, enabling exporters to receive payment and importers to ensure they are paying for the correct goods or services. 

This form of finance includes a variety of tools, such as guarantees and advance payments, that help businesses manage cash flow and reduce payment risks when trading internationally. Also known as ‘export finance’, trade finance is essential for making global trade transactions feasible and secure, thereby supporting the smooth flow of goods and services across borders.