The problem trade finance solves

If you're a wellness or supplements brand selling into retail, you already know this feeling: your suppliers want payment upfront before they'll start production, but your retail customers won't pay you for 30, 60, or even 90 days after delivery.

That gap — between money going out and money coming in — is the single biggest cash flow challenge facing growing wellness brands. And the cruel irony is that it gets worse the more successful you are. Every new retail account you win stretches the gap further.

This is where trade finance comes in.

Trade finance in plain English

Trade finance is a way to bridge that timing mismatch. Instead of your business absorbing the full cost of waiting for payment, a financing provider steps in to make sure your supplier gets paid quickly — while you repay on terms that match when your own customers pay you.

It's not a loan in the traditional sense. There's no large lump sum, no lengthy application, no asset security. Trade finance is tied to specific orders and invoices. You use it when you need it, for the amount you need, and the cost is transparent and predictable.

Think of it as working capital that's shaped around how trade actually works — not how banks wish it worked.

Why traditional finance doesn't fit

Most wellness founders have already discovered that the usual options don't quite work:

Bank loans

Designed for stable, predictable borrowing against established assets. But a growing brand's financing needs change month to month. Banks don't like that kind of variability.

Invoice factoring

Requires outstanding invoices to sell. But if you're paying your supplier before goods have been delivered, there's nothing to factor yet.

Credit cards

Carry fees that eat into margins, and many suppliers won't accept them due to chargeback risk.

Overdrafts

Can help with day-to-day cash flow, but rarely large enough to cover the cost of scaling into multiple national retailers simultaneously.

Trade finance fills the gap that none of these options cover — the specific, order-by-order working capital need created by the timing mismatch between paying suppliers and collecting from retailers.

How trade finance works in practice

The mechanics are simpler than most people expect. Here's a typical flow:

  1. 1 An order is placed. Your supplier raises an order for the goods you need — say, a production run of supplements for a major retailer.
  2. 2 Financing is requested. Instead of paying the full amount upfront, you request financing through the trade finance provider. You choose your repayment terms — typically 30, 45, or 60 days.
  3. 3 Your supplier gets paid immediately. The finance provider pays your supplier straight away, usually the next business day. Your supplier doesn't wait, doesn't chase, and doesn't carry any credit risk.
  4. 4 You repay on agreed terms. After the agreed period — once your retailer has paid you, or close to it — you repay the finance provider.

The cost is a percentage of the order value, typically in the range of 2–4% per 30-day period depending on the market and provider. That's not cheap compared to a mortgage, but the real comparison isn't trade finance versus a bank loan. It's trade finance versus not placing the order — versus scaling more slowly to keep cash flow survivable.

Who benefits from trade finance?

Both sides of the transaction gain something meaningful.

For buyers (brands and retailers): You get access to the working capital you need to place larger orders, meet retailer demands, and take advantage of volume pricing — without locking up your own cash. You can stock the inventory your sales team needs without waiting for your bank balance to catch up with your ambitions.

For suppliers (manufacturers and wholesalers): You get paid immediately and don't have to act as an informal bank to your own customers. No more chasing invoices. No more absorbing credit risk. You can focus on manufacturing and fulfilment, knowing that payment is already sorted.

For the relationship: This might be the most underrated benefit. When payment is no longer a source of tension, both parties can focus on what actually matters — product quality, timely delivery, and building a trading relationship that supports long-term growth.

What makes trade finance different from BNPL?

You might have come across "Buy Now, Pay Later" in a consumer context — services like Klarna or Afterpay that let shoppers split payments. B2B trade finance works on a similar principle, but it's designed for the realities of wholesale trade:

  • Higher order values — we're talking thousands or tens of thousands per order, not £50 trainers
  • Longer terms — 30 to 90 days, aligned with how retail payment cycles actually work
  • Commercial credit assessment — based on the trading relationship and business fundamentals, not a personal credit score
  • Integrated into the supply chain — the financing is embedded in the ordering process, not bolted on afterwards

Is trade finance right for your business?

Trade finance tends to be a strong fit if:

  • You're selling into retailers who pay on 30–90 day terms
  • Your suppliers require payment upfront or on short terms
  • You're growing faster than your cash reserves can support
  • You've been turning down orders or limiting production runs because of cash constraints
  • You want to take advantage of volume discounts but can't tie up the capital

It's less relevant if you're operating purely direct-to-consumer with immediate payment, or if your suppliers already offer generous credit terms.

A real-world example

Consider a transdermal patch brand that wins shelf space at a major national retailer. The retailer's terms are net 60 — they'll pay 60 days after delivery. But the manufacturer needs 50% upfront to start production and 50% before shipping.

Without trade finance, the brand has to find the cash from somewhere — personal savings, credit cards, or simply turning down the opportunity. With trade finance, the manufacturer gets paid immediately, the brand repays after 60 days when the retailer settles up, and the order goes ahead.

The cost of financing is a fraction of the margin on the sale. The cost of not financing is the lost revenue, the missed shelf space, and the retailer who moves on to a competitor.

What to look for in a trade finance provider

Not all trade finance providers are built for the wellness industry. Here are some things worth considering:

  • Industry understanding. Does the provider understand the dynamics of wellness and supplements — the seasonality, the regulatory landscape, the relationship between brands and retailers?
  • Speed. When a retail order comes in, you often need to move fast. Look for providers that can approve and fund within days, not weeks.
  • Transparency. The fee structure should be clear and predictable. You should know exactly what financing will cost before you commit to an order.
  • Flexibility. Your financing needs will change as you grow. A good provider should be able to scale with you — from your first £10,000 order to your hundredth.
  • Trust and compliance. Your trade finance provider is handling money between you and your suppliers. They should be properly regulated, transparent about how funds are managed, and operating with appropriate safeguards.

Getting started

If you're a wellness brand navigating the cash flow pressures of retail growth, trade finance might be exactly the tool you didn't know you needed. The right provider won't just solve a cash flow problem — they'll give you the financial flexibility to say yes to opportunities that would otherwise be out of reach.

Alethium provides trade financing designed specifically for the wellness and supplements industry. If you'd like to learn how we can help your business grow without the cash flow squeeze, book a demo and we'll walk you through it.

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