Trade Finance Bridging Loans: Bridge Your Cash Gaps Fast
Trade Finance Bridging Loans: Bridge Your Cash Gaps Fast
Ever had a supplier payment due before your receivables clear? That cash pinch can stall your entire operation. A trade finance bridging loan swoops in to fill that gap, letting you settle invoices and keep goods moving without sweating over cash flow. It’s short-term finance that plugs timing mismatches—no fuss, just funds.
What Is a Trade Finance Bridging Loan?
A trade finance bridging loan is a temporary facility that covers your working-capital shortfall between paying suppliers and collecting from buyers. Typically secured by inventory, receivables or purchase orders, it runs from a few days up to several months. You clear the bridge when you get paid—or when a longer-term facility kicks in.
When to Use a Bridging Loan?
- Seasonal spikes: Ramp up inventory before peak demand, then repay once sales roll in.
- Export deals: Pay overseas vendors on time while waiting for payment terms of 60–90 days.
- Large one-off orders: Fund a single big shipment without tapping your revolving credit line.
- Grace-period gaps: Bridge the few weeks between supplier deadlines and buyer payment dates.
How It Works: Step-by-Step
| Step | Action | Turnaround |
|---|---|---|
| 1 Application | Submit purchase orders, pro forma invoices and company financials. | 1–2 days |
| 2 Underwriting | Provider assesses collateral (POs, inventory age) and your credit profile. | 2–3 days |
| 3 Approval & Docs | Sign facility letter, supply account control agreements. | 1 day |
| 4 Disbursement | Funds wired directly to your supplier or to your escrow account. | 24 hours |
| 5 Repayment | Loan settled from buyer payment or refinance into long-term credit. | Upon receivable collection |
Costs & Fees
Bridging loans carry interest rates higher than your standard term debt—expect anywhere from 7–18% annualized, depending on deal size and collateral quality. Upfront facility fees (0.5–1% of the funded amount) plus handling fees and commitment charges are common. Always run the numbers: if your gross margin on the transaction exceeds financing costs, it’s worth the bridge.
Risks & Safeguards
- Collateral lien: Lenders often take first-priority claims on your receivables or stock—plan accordingly.
- Early repayment penalties: Some facilities tack on break fees if you clear the loan days early.
- Credit triggers: Watch covenants like maximum DSO (days sales outstanding) or inventory turnover ratios.
- Due diligence: Prepare audited financials and clear inventory reports to speed up approval.
Case in Point
A mid-sized importer needed €1.2 million to pay overseas suppliers on T/T terms, while their buyers paid in net-60. Financely arranged a bridging loan secured by inventory aged under 90 days and receivables aged under 30 days. Funds hit their supplier’s account in 48 hours, and repayment came out of buyer collections six weeks later—no overdraft hit, no project delays.
Don’t let a timing mismatch kill your margins. Financely’s trade finance team delivers bridging solutions tailored to your cycle, collateral and cash-flow profile. From application to repayment, we streamline every step so you keep goods moving and capital working.
Learn How It WorksKey Takeaways
- Bridging loans fill the gap between supplier payment and buyer collection.
- Secured by purchase orders, inventory or receivables—approval in days.
- Rates run 7–18% annualized, plus facility and handling fees.
- Watch collateral liens, covenants and early-repayment terms.
- Financely cuts through the red tape: apply today and fund in 48 hours.
Get Started With Us
Submit Your Deal & Receive a Proposal Within 1-3 Working Days
Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.
All submissions are
promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.
Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.
Trade Finance
Tap into solutions like letters of credit, bank guarantees, and payment facilitation. We address the challenge of global transaction risk through structured strategies that foster cross-border growth. Complete the form to unlock streamlined funding aligned with your commercial objectives.
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Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.
