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Trade loans explained

Business finance are often necessary for a business to achieve short & long-term strategic goals. Contrary to popular believe, applying for a trade or business loan does not mean your business is struggling, in fact, it means the opposite.

What is trade financing, a trade loan?

Trade finance loans are the ideal way to keep your inventory at a sufficient levels for trouble-free business trade. Businesses rely on trade loans to keep cash flow steady, update product lines, increase inventory supplies, and respond to high demand. Experts will tell you that you need to have money to make money and using someone else’s money is the nimble-witted way to go.

Why do you need a trade loan?

You need two things to grow your business; 1. The motivation to work for it and 2. The necessary capital.

You can have all the motivation you need to turn your business into an industry giant, but without the ‘dough’ and without applying your finances properly, it means nothing. When used correctly, a trade finance loan will take your business growth to the next level and ensure that your stock levels are always up to standard. There is nothing worse than turning away clients because you do not have the stock!

Private companies cannot raise money by issuing bonds or stock on a stock exchange. Companies may use all or part of their existing assets as collateral for a loan that is used for general business expenses.

As noted above, inventory financing allows businesses to purchase inventory to run their businesses. The reasons why companies rely on this kind of financing include:

  1. Keeping stock levels steady through busy and slow seasons
  2. Updating product lines
  3. Increasing supplies of inventory
  4. Responding to high customer demand

When should you use a trade loan?

When your demand for goods from your clients outstrips your available cash flow to service them, you need trade finance. Make sure the profit you derive from the additional sales cover the cost of the loan, otherwise you are just moving backwards!

How does a trade loan work?

This kind of financing is based on the total value of the company’s inventory. The lender issues the company a specific amount of money. The company agrees to make fixed payments every month or to pay the loan off in full once the inventory is sold.

Here is an example of how the trading finance cost is worked out on R100,000 loan that was offered to a WeBridge client previously:

* Note: Your quoted rate will depend on your risk profile and appetite of current financiers

.WeBridge gets the best possible rate from a range of financiers for you for a trade loan. If you move products from point A to B, like when you have products that need importing, that’s no problem for us. We will include the cost of customs in order to get your product in here and ready for you clients as soon as possible.

What do you need to apply for a trade loan?

1.            Your company must be trading for at least 12 months.

2.            You must have a steady stream of income for the past 3 months.

3.            Your company must have a turnover of at least R 1 million in the past year.

Why WeBridge?

We love to see businesses grow and we want you to succeed in the quickest, easiest way possible!

We know that as a businessman/woman time is the last thing you have available. Application through a bank is lengthy with loads of paperwork, strict legislations and many hoops to jump through before you have access to these funds.

When applying through WeBridge you can have your finances available in a much shorter time. No waiting on call centers or back and forth sending of seemingly endless, pointless documents.

You have done all the hard work, poured blood and sweat into your business to get where you are, so let us take the leap for you and open up doors that seemed unreachable until now.

We’re fast, we’re effective and we can provide trade loans in order to make your business thrive in no time.  Contact us to fast forward your business into a growth spurt today!