# What is trade finance? What trade finance is, how it works for UK businesses that import or export goods, the main product types, and how trade finance differs from general short-term working capital credit. **Site:** [creditcorp.co.uk/learn/what-is-trade-finance/](https://creditcorp.co.uk/learn/what-is-trade-finance/) Creditcorp is the growing name for the Credicorp group. Credicorp Limited is the lender behind it — short-term working capital for incorporated UK businesses. No personal guarantee on any product. This page is a guide; applications go to [credicorp.co.uk](https://credicorp.co.uk/). ## Contents - The problem trade finance solves - The main types of trade finance - How to choose the right trade finance product - Trade finance questions - Related guides - Short-term trade gap? Credicorp can bridge it. ## Step-by-step guide **Step 1: Identify the specific trade finance need** Different trade problems need different products. Do you need to guarantee payment to a foreign supplier? That may be a letter of credit. Do you need to release cash from invoices before customers pay? That is invoice finance. Do you need a short-term loan to buy a batch of stock for resale? That could be a trade loan or a working capital facility like Credicorp's Bridging Loan or Flex. Define the specific timing problem before choosing a product. **Step 2: Understand the trade cycle that creates the cash flow gap** Map out the timing of money in and money out for a typical trade transaction: when do you pay for goods, when do you receive them, when do you sell them, when does the customer pay? The gap between paying for goods and collecting revenue from the sale is the cash flow gap. The size and duration of that gap determines how much finance is needed and for how long. **Step 3: Match the product to the duration and nature of the gap** Short gaps (under 84 days) in a trading company's working capital can often be bridged with a Credicorp Business Bridging Loan or Flex facility — simple, fast, and with no need to tie the facility to a specific shipment or invoice. Longer or more complex gaps — especially in international trade — may need specialist trade finance products from banks or specialist providers. **Step 4: Apply at credicorp.co.uk for short-term working capital needs** If the need is a short-term working capital gap driven by the company's trade cycle — not a specialist trade finance instrument — Credicorp can help. The Business Bridging Loan covers up to 84 days; the Flex revolving facility allows repeated drawing as cash flow allows. Apply at credicorp.co.uk. For specialist trade finance (letters of credit, supply chain finance), a business bank or specialist provider is the right starting point. ## Frequently asked questions **What is trade finance?** Trade finance is a broad term for financial products that facilitate international or domestic trade — specifically the purchase and sale of goods between businesses. The core problem it solves is the timing gap between when a buyer must pay for goods and when the buyer can resell those goods and recover the cash. Trade finance products bridge that gap: they allow the buyer to pay the supplier on time while the buyer waits for revenue from selling the goods on. **What are the main types of trade finance?** The main products are: (1) Letters of credit (LC) — a bank guarantees payment to the seller, subject to the buyer meeting specified conditions; used widely in international trade; (2) Invoice finance — selling outstanding invoices to a lender to release cash before the customer pays; (3) Supply chain finance (reverse factoring) — a buyer arranges early payment to suppliers via a lender, funded by the buyer's credit strength; (4) Trade loans — short-term loans specifically to fund the purchase of goods for resale; (5) Import/export finance — product-specific credit lines for importers or exporters. **Is trade finance the same as working capital finance?** They overlap but are not the same. Working capital finance is a broader category — it covers any short-term credit used to fund the day-to-day operations of a business, including payroll, rent, and overheads. Trade finance is more specific: it is used to fund the purchase, shipment, or sale of goods. A Credicorp Business Bridging Loan or Flex facility is working capital finance — it can be used for trade purposes but is not tied to a specific shipment or invoice in the way that a letter of credit or trade loan is. **Does Credicorp offer trade finance?** Credicorp's products — the Business Bridging Loan, Flex revolving facility, and Slice invoice finance — are short-term working capital products rather than specialist trade finance instruments. They are not letters of credit, supply chain finance programmes, or import/export credit lines. However, they can be used by a trading business to bridge a cash flow gap that arises from a trade cycle — for example, to fund stock purchases while waiting for customer payments. The right product depends on the specific need; read the bridge vs Flex vs Slice guide for a product comparison. **Where can a UK business get trade finance?** Trade finance is offered by: high street banks (Barclays, HSBC, NatWest all have trade finance desks); specialist trade finance lenders; export credit agencies (UK Export Finance for exporters); and invoice finance providers. The right provider depends on the product type needed — letters of credit typically require a bank relationship; invoice finance is available from many specialist lenders; trade loans are available from banks and specialist short-term lenders. A business finance broker can help identify the right match. ## About Creditcorp / Credicorp Credicorp Limited is a UK short-term business lender. Products: Business Bridging Loan (14–84 days, 0.25%/day), Credicorp Flex (revolving credit, 0.25%/day on drawn balance), Credicorp Slice (invoice-backed, flat fee). Incorporated UK companies and LLPs only. No personal guarantee. No debenture. Same-day decisions. Total charges capped at 100% of principal. - [Apply or get a quote](https://credicorp.co.uk/) - [Products overview](https://credicorp.co.uk/products/) - [Eligibility](https://credicorp.co.uk/eligibility/) - [All learn guides](https://creditcorp.co.uk/learn/)