The trade finance service South Africa needs

The trade finance service South Africa needs

Trade plays a vibrant role in our country’s economy. Decades ago, South Africa earned most of its income from mining and farming. More recently, the economy has benefitted more from trade, tourism and financial services, among other sectors. As a key growth industry, trade made up an impressive 15% of South Africa’s GDP in the third quarter of 2017.

As in many other countries around the world, trade plays a key role in keeping our economy healthy. But there is one issue that gets in the way of creating a truly thriving trade sector in South Africa. That headwind is access to finance. And it affects many exporters and importers who struggle with cash flow issues in their businesses.

Trade finance service South Africa: a quick recap

Before going into detail on how to find the right trade finance partner, it’s important to understand what trade finance is. In broad terms, trade finance relates to all financial activities that support commerce and trade.

These include (but are not limited to):

Many businesses that trade goods and materials have times when there’s more money flowing out of the company than flowing in. This usually happens because there is a time lag between buying materials, making products, shipping goods to the customer and awaiting payment. This process can take months, which may mean the business has to dig deep into its pockets to pay staff, rent and many other operational expenses.

In this situation, the seller usually wants fast payment, but the buyer wants credit sales terms to delay payment for as long as possible. Both parties simply want to keep cash where they need it most – in their businesses.

This is where trade finance offers both parties the solution they want. The seller (exporter) is paid faster, while the buyer (importer) can benefit from extended credit.

How does trade finance work?

Put simply: it’s a finance facility provided by a third-party that fosters domestic or international trade.

When you look for trade finance service South Africa, you’ll find a range of solutions from multiple companies. But only one can offer a flexible, asset-backed facility that is tailored to suit your operational cycle – namely: Merchant Factors.

Why Merchant Factors?

Launched in 1988 to offer companies working capital solutions that did not derive from bank loans or overdrafts, Merchant Factors has become an expert trade finance provider for both local and imported products. Because every business cycle is unique, Merchant Factors designs its trade finance solutions to suit each organisation.

This flexible firm can put together a trade finance agreement for your business that matches your company's cash flow cycle. Every payment made by Merchant Factors on your behalf will have an agreed repayment date. This is set according to your working capital cycle. As a result, you have enough time to receive goods, sell them and collect the funds before your repayment is due. (Depending on your agreement, you could collect the funds directly from the sale or through the debtor created by the sale.)

Ready to access these benefits?

As an expert trade finance partner, Merchant Factors makes it possible for you to:

  • Pay for imports or get paid for exports quickly
  • Negotiate better terms with your trading partner
  • Access purchasing advantages by buying in bulk
  • Take advantage of early payment discounts
  • Increase sales and profits
  • Explore new business opportunities
  • Thrive through seasonal business cycles

Are you looking for a working capital solution that’s designed for companies that trade? Whether you want to access funds to stay afloat or get your growth plans underway, a trade finance solution from Merchant Factors could help you to reach your goals.

Finance beyond the Numbers.