Trade Finance in South Africa
Up To R5 Million in Capital For Importers, Exporters & Distributors
New Heights Finance connects South African businesses with specialist trade finance solutions — from letters of credit and import funding to supply chain finance and inventory funding. We bridge the gap between paying your suppliers and collecting from your customers, keeping your trade flowing without tying up your working capital.
Facility Conditions at a Glance
Letters of credit arranged
Import & export funding
Supply chain finance
Inventory & stock finance
Invoice discounting
Trade finance is a set of financial instruments and services that help businesses buy and sell goods — particularly across borders — by mitigating payment risk and providing working capital throughout the trade cycle. It bridges the gap between when a business pays its suppliers and when it collects from its customers. Common trade finance products include letters of credit, import funding, supply chain finance, invoice discounting, and pre- and post-shipment finance. In South Africa, trade finance facilities typically range from R50,000 to R5 million with terms of 3 to 6 months.
What is Trade Finance?
Trade finance is essentially the financial infrastructure that makes international and domestic trade possible. When a business in South Africa imports goods from overseas, there is an inherent timing problem: the supplier wants payment before shipping, but the buyer won’t receive the goods — or payment from their own customer — for weeks or months. Trade finance solves this gap.
It encompasses a wide range of financial products — letters of credit, import funding, supply chain finance, stock and inventory finance, and invoice discounting — each designed to address a different point in the trade cycle. Together, they allow businesses to buy from suppliers, fulfil customer orders, and receive payment without tying up their own working capital or taking on traditional debt.
Unlike a traditional business loan, PO funding is not based on your credit history, your balance sheet, or your trading track record. Approval is based on two things: the validity of the purchase order and the creditworthiness of the end customer placing the order. This makes it one of the most accessible forms of business funding available to South African SMEs, startups, and growing businesses.
New Heights Finance is a finance broker. We do not provide PO funding directly — we connect you with specialist private lenders, assess the transaction on your behalf, and guide you through the process from application to payout.
What Are The Different Types of Trade Finance?
Import & Stock Finance
Funding used to pay an overseas or local supplier for goods before they arrive. Importers often need to pay well in advance of receiving stock, tying up significant cash. Import funding provides a line of credit specifically for these transactions, keeping inventory moving without draining working capital.
Letters of Credit (LC)
A letter of credit is a bank's guarantee to pay the seller on behalf of the buyer, provided the seller meets specified conditions — typically shipping the goods and presenting the correct documentation. LCs are widely used in international trade to eliminate payment risk for both parties and are particularly essential when trading with new or unknown counterparties.
Supply Chain Finance
Supply chain finance optimises cash flow across the entire trade cycle — from raw material purchase through to final delivery and customer payment. Funding partners can facilitate early payment to suppliers while extending credit terms to buyers, improving the financial health of all parties in the supply chain simultaneously.
Invoice Discounting & Factoring
Invoice discounting allows businesses to sell outstanding invoices to a funder at a discount in exchange for immediate cash. Rather than waiting 30, 60, or 90 days for customer payment, you receive a percentage of the invoice value upfront. The balance — less the discounting fee — is remitted once your customer pays.
Pre- & Post-Shipment Finance
Pre-shipment finance provides working capital to fund the production, sourcing, or packaging of goods before they are shipped to an overseas buyer. Post-shipment finance provides funds after goods have been shipped but before the international buyer pays — bridging the period between export and receipt of funds.
Trade Credit
Trade credit is an arrangement where a seller allows a buyer to pay for goods or services after receipt — typically 30, 60, or 90 days. It can be unsecured (no collateral, higher risk to the seller) or secured (buyer offers an asset as security). Trade credit lines enable buyers to manage cash flow while maintaining supplier relationships.
How Does Trade Finance Work?
We handle the heavy lifting. You submit one application — we approach multiple lenders, compare offers, and present you with the best available terms. No multiple credit checks, no lender shopping on your own.
You receive or place a confirmed order
A customer places an order with your business, or you identify goods to import. You have a confirmed trade transaction but need capital to fulfil it — to pay your supplier before your customer pays you.
Submit your transaction details
You submit the order documentation, supplier details, and financial information to New Heights Finance. We assess the transaction, the creditworthiness of the buyer, and the viability of the deal.
Facility structured and approved
Our funding partners structure the appropriate facility — whether a letter of credit, import funding line, supply chain facility, or invoice discounting arrangement — and issue approval. Setup typically takes up to 3 weeks for new facilities.
Supplier paid, goods released
The funder pays your supplier directly — or issues a letter of credit — enabling the supplier to release or manufacture the goods. Payments can be made to local or overseas suppliers.
Goods delivered, customer invoiced
Goods are delivered to your customer and you raise the invoice. The funder manages collections or monitors payment depending on the facility type.
Customer pays, facility settled
Your customer pays the invoice. The funder deducts the agreed fees and remits your profit margin. Your facility is available for the next transaction.
Who is Trade Finance For?
Importers
Businesses that need to pay overseas suppliers before receiving payment from their local customers. Import funding lines bridge the gap between supplier payment and customer collection.
Exporters
Businesses selling goods to international buyers who require payment assurance or need to offer extended credit terms to win export contracts without carrying the risk themselves.
Wholesalers & distributors
Businesses managing large inventory volumes and complex supply chains who need working capital to buy stock before selling it — without tying up cash or credit lines.
Manufacturers
Manufacturers requiring funds for raw materials or components to fulfil production orders — particularly those with long production cycles between receiving an order and getting paid.
SMEs & growing businesses
Smaller businesses looking to scale trading operations but facing traditional bank lending limitations — collateral requirements, long approval timelines, or insufficient track record.
Commodity traders
Businesses dealing with significant commodity volumes where transactions require substantial upfront capital — often with thin margins and tight timing between buying and selling.
What Do I Need To Apply For Trade Finance?
Trade finance facilities are more structured than most other business loan products. Lenders require a comprehensive, well-presented application. Incomplete documentation significantly delays or prevents approval.
| Requirement | Detail |
|---|---|
| Trading history | Minimum 2 years of proven, successful trading in the relevant industry |
| Confirmed order | A binding purchase order from a creditworthy private company buyer (not government, municipal, or private individual) |
| Accounts receivable | Accounts receivable funding must be possible — debtor quality is a key assessment factor |
| Accredited supplier | The goods supplier must be an accredited and verifiable supplier |
| Minimum transaction | R1,000,000 minimum transaction size for capital funding facilities |
| Credit record | The business and its principals must have a clean credit record |
| Profitability | The business must be demonstrably profitable — private lenders only consider transactions with financial merit |
What Are The Benefits Of Trade Finance?
Mitigate payment risk
International trade carries inherent risk — a new overseas supplier could fail to deliver, or a foreign buyer could default on payment. Trade finance instruments like letters of credit eliminate this risk by guaranteeing payment only when contractual conditions are met. Both buyer and seller trade with confidence, even when working with unknown counterparties for the first time.
Improve cash flow across the trade cycle
The fundamental problem of trade — you pay suppliers before customers pay you — creates cash flow gaps that limit growth. Trade finance bridges this gap precisely, advancing capital at the point it's needed and recovering it when the customer pays. Unlike a general business loan, the facility is tied to the transaction itself, meaning costs are directly proportional to revenue generated.
Accept larger orders and enter new markets
A confirmed order only generates revenue if you can fulfil it. Without trade finance, businesses routinely turn down profitable contracts because they lack the working capital to pay suppliers upfront. With a trade finance facility in place, you can accept contracts that exceed your current cash reserves, expand into new export markets, and take on international buyers who require credit terms you couldn't otherwise offer.
Strengthen supplier relationships
Paying suppliers on time — or early — builds credibility and trust in trading relationships. Suppliers who are paid promptly are more likely to prioritise your orders, offer better pricing on bulk purchases, and extend preferential terms as the relationship grows. A letter of credit or direct supplier payment through a trade finance facility signals financial reliability that strengthens your position in every negotiation.
Keep core capital free for operations
Tying up your own cash in inventory, supplier payments, or long-dated receivables limits your ability to invest in equipment, staff, marketing, or new opportunities. Trade finance allows you to use a funder's capital for the trade transaction while preserving your own working capital for day-to-day operations and strategic decisions. Your balance sheet remains more flexible and your business more agile.
Flexible and transaction-specific
Unlike a fixed business loan, trade finance is structured around your specific trade cycle, industry, and transaction. Each facility is tailored to the goods being traded, the creditworthiness of your buyer, and your payment terms. As your transaction volume grows, your facility can grow with it. There is no single rigid structure — the right product is matched to the right transaction.
Competitive advantage over unfunded competitors
Businesses with access to trade finance can offer their buyers extended credit terms — 30, 60, or 90 days — that competitors without funding facilities cannot match. This ability to offer trade credit is often a decisive factor in winning contracts, particularly in wholesale and distribution markets where buyers expect flexible payment arrangements as standard.
Faster approval than traditional bank credit
While trade finance facilities take longer to set up than some short-term products (typically up to 3 weeks), they are significantly faster to arrange than traditional bank business credit lines — which can take months and often require property collateral, extensive financial history, and formal credit committee approval. Private lenders assess the trade transaction itself, which streamlines the process considerably.
What Does Trade Finance Cost?
| Scenario | Loan amount | Term | APR | Total repayment |
|---|---|---|---|---|
| Min APR | R1,000,000 | 12 months | 13% | R1,130,000 |
| Mid APR | R1,000,000 | 6 months | 20% | R1,100,000 |
| Max APR | R1,000,000 | 3 months | 30% | R1,075,000 |
APR range 13%–30% · Monthly discounting fee up to 7% · Once-off set-up fee up to 3% · Figures are indicative. Subject to due diligence and lender T&Cs.
Trade Finance vs Business Funding
| Feature | Trade finance | Invoice discounting | PO funding | Unsecured business loan |
|---|---|---|---|---|
| When funds are used | Before & during trade cycle | After goods delivered | Before goods sourced | Any time |
| Security required | Trade transaction | Unpaid invoices | Purchase order | None |
| Credit history | Clean record needed | Buyer quality assessed | Buyer quality assessed | Required |
| Trading history | Min 2 years | Existing debtors needed | Not required | Min 12 months |
| Setup time | Up to 3 weeks | 3–5 days | 48 hrs – 7 days | 24 hours |
| Best suited for | Importers, exporters, supply chains | Businesses with slow-paying clients | Businesses with confirmed orders | Established businesses needing capital |
Apply for Trade Finance
Submit your transaction details. Comprehensive applications are approved faster.
- Letters of credit arranged
- Import & export funding
- Supply chain finance
- R50,000 – R5,000,000
- APR from 13%
Document Checklist
Complete submissions are approved faster.
Frequently Asked Questions
What is trade finance?
What is trade finance used for?
Is trade finance a loan?
Who qualifies for trade finance in South Africa?
How quickly can trade finance be approved?
How does trade finance work?
What are trade finance products?
The main trade finance products are:
- Letters of Credit (bank guarantees of payment for international transactions)
- Import Funding (capital to pay overseas suppliers)
- Supply Chain Finance (working capital across the full trade cycle)
- Invoice Discounting and Factoring (cash against outstanding invoices)
- Pre-Shipment Finance (funds for production or sourcing before export)
- Post-Shipment Finance (funds after export but before buyer payment)
- Trade Credit lines.
What documents are needed for trade finance?
Required documents include:
- Certificate of Incorporation and founding statements
- Latest audited financial statements
- Up-to-date management accounts
- Budget and cash flow projections
- Debtors and creditors age analysis for the last 3 months
- The purchase order from your client
- The supplier quotation or proforma invoice
- Your purchase order to the supplier
- A statement of personal assets and liabilities for all shareholders and members, along with their ID documents.
Is trade finance available for small businesses?
Do you need collateral for purchase order funding?
No. Purchase order funding requires no collateral. The purchase order and the creditworthiness of your end customer serve as the security for the transaction. Your fixed assets, property, equipment, or personal assets are not at risk and are not pledged as part of the arrangement.
Trade without limits.
We’ll fund the gap. Apply now.
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