Trade Finance Forum › Forums › Trade Finance › Basics › How does international trade financing vary from traditional forms of financing? › Reply To: How does international trade financing vary from traditional forms of financing?
Hi there, the word trade “finance” refers to a wide variety of banking and corporate financial services that are used to facilitate international commerce. Trade financing is not the same as traditional financing. Traditional financing is a kind of general financing used to regulate liquidity or solvency. However, this does not always mean that the buyer is short on cash. Trade finance, on the other hand, may be used to mitigate risks specific to international trade, such as fluctuations in currency value, political unpredictability, payment difficulties, or doubts about a party’s credibility.