Professional commentary. Structured trade finance and private credit overview for importers, exporters, and commodity traders.
How to Secure Trade Finance Without Relying on Traditional Banks
Many traders and importers face the same problem. Traditional banks keep limits flat, reduce country lines, or close files that fall outside narrow policy boxes, while working capital needs keep growing. If you insist on forcing every transaction through a branch lender, you will keep hearing polite versions of no.
The alternative is to treat funding as a structured trade finance problem. That means building lender grade structures around real trade flows and then placing those facilities with non bank lenders, non bank financial companies, and private credit funds that actually have risk appetite for commodity trade finance and supply chain risk. The bar is higher, but the capital is real.
This article walks through how to get trade finance without relying on traditional banks as the only answer, what margin requirements to expect, and where structured trade finance fits inside the wider private credit market.
1. Why traditional banks often step back from mid market trade
Large banks still support global trade flows for top tier corporates and state linked entities. The squeeze is felt in the mid market. Capital rules, sanctions exposure, country risk concerns, and internal risk scoring push smaller traders down the priority list even when the trade is sound on fundamentals.
You see the effect in practice when a bank declines a facility with comments such as lack of appetite, sector exposure full, or counterparty outside policy. That response may say more about their balance sheet than about your business. Persistent pursuit of the same group wastes months while competitors secure access to non bank lenders that specialise in structured trade finance.
The direction of travel is clear: bank balance sheets gravitate toward low risk, low complexity, high fee business. Complex, cross border commodity trade finance with moderate sponsor size sits in a different bucket.
2. What structured trade finance actually focuses on
Structured trade finance does not start from your balance sheet and hope for the best. It starts from the trade itself. Facilities are arranged around self liquidating flows, collateral, and control points. Cash comes from the sale of goods or performance of a contract rather than from general corporate cash flows.
| Trade stage | Structured trade finance tools | Key focus for lenders |
|---|---|---|
| Pre procurement and production | Pre export finance, prepayment, structured working capital lines | Strength of offtake contracts, hedging, sponsor equity, and project delivery record |
| Shipment and in transit | LC backed loans, UPAS LC, documentary trade loans | Documentary control, carrier quality, insurance, and enforceable title transfer |
| Inventory in storage | Inventory finance, repo style stock finance, collateral management | Location and control of stock, price risk, liquidity of commodity or goods |
| Receivables after delivery | Receivables finance, insured receivables, payables finance | Buyer credit strength, payment history, dilution risk, and concentration |
For commodity trade finance, this means lenders want to see detailed trade maps, not just a pitch deck. Volumes, routes, Incoterms, counterparties, quality specs, and pricing mechanics have to be clear. Without that, discussions with specialist capital will stall quickly.
3. Where non bank financial companies and private credit step in
Non bank financial companies and private credit funds raise money from pension funds, insurers, and family offices looking for yield from short dated, asset backed exposures. Structured trade finance and commodity trade finance are part of that menu when risk is presented correctly.
Specialist trade finance funds
These funds focus on trade related assets as a core strategy. They may run borrowing base facilities, transactional commodity trade finance lines, or receivables programs and are comfortable with complex supply chains as long as control and monitoring are strong.
Non bank financial companies
Platforms and finance companies often focus on receivables and payables. They extend credit based on buyer risk and invoice performance rather than on your relationship history with a particular bank.
Private credit managers
Larger managers run diversified pools where a sleeve is dedicated to trade and working capital. Facility sizes are usually larger, and they require high quality collateral, detailed legal work, and strong sponsors.
Bank and fund combinations
In some cases a bank issues letters of credit or guarantees while private credit funds provide the funded risk behind the structure, giving you access to bank instruments backed by non bank capital.
Access to these groups is rarely achieved with random emails. Files need to be curated, and lenders expect you to know exactly what you want funded.
4. Margin requirements and collateral expectations
Many sponsors still try to obtain 100 percent funding on cargo cost or invoice value. Serious non bank lenders see that as a red flag. In structured trade finance, they expect you to carry meaningful first loss risk.
- Receivables. Healthy portfolios of trade receivables from solid buyers may support advance rates in the 70 to 85 percent range on eligible invoices.
- Inventory and in transit goods. Lenders often work between 50 and 75 percent of conservative net realizable value, depending on price volatility and control of stock.
- Pre export and prepayment. Facilities that fund production or pre shipment risk usually sit closer to 30 to 60 percent funding levels, supported by contracts and hedging.
Margin requirements are not there to frustrate you. They exist because price shocks, counterparty defaults, and logistics issues happen, and lenders want a buffer. If you are unwilling to allocate capital to margin, private credit is not a match for you.
Expect to fund security packages, collateral managers, legal work, and monitoring from your own resources. Any lender that claims to fund complex trade flows with no margin and no costs deserves a hard second look.
5. How to get trade finance from non bank lenders step by step
Securing funding from non bank financial companies and private credit funds is a process, not a quick enquiry. The sponsors who close deals follow a clear sequence instead of sending scattered requests.
- Map your trade flows and working capital need. Build a schedule of historic and projected trades with volumes, routes, Incoterms, payment terms, gross margins, and counterparties. Identify the exact cash gaps at each stage instead of quoting a round number.
- Select suitable structured trade finance tools. Match each stage of the trade to facilities such as borrowing base lines, transactional commodity trade finance, inventory finance, or receivables programs. You do not need every product. You need the ones that fit your flows.
- Prepare a lender grade data room. Upload corporate documents, full financial statements, management accounts, trade schedules, contracts, logistics documents, and KYC. Poor documentation is one of the fastest ways to kill interest.
- Build a realistic term sheet outline. Before you speak to lenders, define requested limits, collateral, expected advance rates, margin support, covenants, and pricing ranges. This is where experienced arrangers add real value.
- Run a targeted lender process. Approach a curated list of non bank lenders and private credit funds that are known to fund your type of risk. Speak their language, answer technical questions quickly, and track feedback on structure, margin, and pricing.
- Close and monitor. Once terms are agreed, move quickly through legal work, conditions precedent, and first drawdown. After closing, stay ahead of reporting and covenant tests to protect the relationship.
This is how you get trade finance from serious capital sources. Anything that promises fast approval with no data, no margin, and no scrutiny usually leads nowhere or exposes you to fraud.
6. Examples of sponsors that can succeed with non bank lenders
Regional commodity trader
A metals or agri trader with a few hundred million in annual turnover, thin equity, and mixed access to bank lines can often secure a borrowing base facility from private credit once trade data, counterparties, and collateral are mapped properly.
Importer of FMCG and finished goods
An importer selling into supermarket chains and national distributors may be suited to receivables and payables structures with non bank financial companies that focus on buyer risk and invoice performance.
Industrial distributor and machinery supplier
A distributor with repeat orders of capital equipment can blend supplier credit, LC backed trade loans, and receivables finance into a single structured trade finance program backed by bankable buyers.
Project linked commodity offtake
Sponsors with medium term offtake contracts for energy or metals can tap private credit funds willing to fund against contract cash flows plus collateral, subject to strict security and monitoring.
All of these profiles require real counterparties, verifiable trades, and a clean KYC story. If those basics are missing, there is nothing for lenders to work with.
7. When it makes sense to work with a trade finance arranger
You can try to manage structured trade finance on your own. Some sponsors do. The question is whether you have the bandwidth, lender relationships, and technical knowledge to design credible structures and negotiate directly with private credit teams that review dozens of files each month.
A specialist arranger spends every week building, stress testing, and placing structured trade finance facilities with non bank lenders and private credit funds. They know which lenders can handle specific collateral, which country risks are off limits, and which margin requirements are negotiable. For sponsors with serious volume, paying for that experience is usually cheaper than learning through failed attempts.
The key is to work on a clear mandate with transparent retainers and success fees and to accept that no reputable arranger can or should guarantee funding.
Share Your Trade Flows For A Structured Finance Review
If you have real contracts, repeatable trade flows, and are ready to fund margin and fees, FG Capital Advisors can design a lender grade structure and run a focused process with non bank lenders and private credit.
Start Your MandateDisclaimer. FG Capital Advisors provides advisory services and is not a bank, broker dealer, or asset manager. Any engagement is subject to KYC and AML checks, conflict checks, a signed mandate, and agreed fee terms. Capital raising outcomes depend on sponsor quality, collateral, counterparties, market conditions, and lender decisions. No guarantee of funding is expressed or implied.
