What is trade finance? How importers and exporters get paid safely
By SendPay Business · · 2 min read
- 1Make a link for the amount
- 2Send it in a chat or an email
- 3They tap, pay, and you see it
Trade finance is the set of tools that helps buyers and sellers in different countries trade safely. The seller wants to be paid before goods leave, and the buyer wants the goods before paying. Trade finance puts a bank or other party in the middle to bridge that gap.
The main tools
Tap to explore
Tap each one to see what it means.
Letter of credit
the buyer's bank promises to pay once the seller shows the right documents.
Documentary collection
banks swap shipping documents for payment, without a bank guarantee.
Invoice finance
a lender advances money against unpaid invoices.
Export credit
government-backed support, such as UK Export Finance in the UK.
Which to use
Letters of credit give the most protection but cost the most and take paperwork. Documentary collections are cheaper but riskier for the seller. Many established trading partners simply use open account terms, where the buyer pays by bank transfer after delivery.
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Where SendPay fits
SendPay platforms include GBP, EUR and USD accounts, international transfers and invoicing under your own brand, powered by licensed partners. SendPay does not offer lending, letters of credit or trade finance.
How it works
Your own money app- 1Name it and pick your colours
- 2Choose what it does
- 3Launch when you are ready
Why sign up
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- 🪪A free business accountOpen it in about a minute with your business name, email, password and mobile. No card and no documents to start.
- 💳Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
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- 🚀Your own financial platformDesign and preview your whole platform free, then launch when you are ready.
SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.
Questions people ask
What does a letter of credit cost?
Add up the fees on a letter of credit for an order.
Letter of credit cost calculator →What is an escrow account?
A third party holds money until both sides deliver.
What is an escrow account? →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.