IMA Mudra Group | Trade Working Capital Solutions

Trade Working Capital

Bridge the gap between purchases and sales with flexible trade finance solutions. Unlock working capital, manage cash flow, and grow your business with confidence.

What is Trade Working Capital?

Trade Working Capital finance is a form of short-term financing designed to bridge the gap between the time goods are purchased and the time they are sold by the importer [citation:1]. It helps businesses manage cash flow mismatches, fund inventory purchases, and fulfill supplier payments without straining operational liquidity.

At IMA Mudra Group, we connect businesses with leading UAE banks to access tailored trade finance solutions — whether you're an importer, exporter, or manufacturer dealing with cross-border transactions or domestic supply chains.

Key benefits of Trade Working Capital:

✅ Bridge timing gaps between payables and receivables
✅ Fund inventory and raw material purchases
✅ Access flexible financing for Letters of Credit and Guarantees
✅ Improve supplier relationships with timely payments
✅ Unlock liquidity tied in supply chains

Core Trade Finance Products

Comprehensive solutions for importers, exporters, and businesses engaged in domestic and international trade.

Letter of Credit (LC)

A written undertaking from a bank to make payment to a beneficiary up to the stipulated amount, provided all terms and conditions are complied with [citation:1]. Available as Import LC (Sight and Usance) and Standby LC [citation:8].

Best for: Importers needing to assure suppliers of payment

Finance Against Trust Receipts (FATR)

Finance your open account, LC, and collection trade transactions with flexible financing options. Improves cash flow by allowing you to defer payment while taking possession of goods [citation:2][citation:10].

Best for: Businesses needing post-shipment financing

Short Term Finance (STF)

Make advance or final payments to suppliers with ease. Ideal for payment obligations under open account trade, helping you secure better terms with suppliers [citation:2][citation:10].

Best for: Open account trade and advance supplier payments

Supply Chain Finance (SCF)

Financing the payables in and out of a business across its supply chain. Includes domestic and international SCF, dynamic discounting, and receivable finance [citation:1][citation:9].

Best for: Businesses looking to optimize supplier payment cycles

Letters of Guarantee (LG)

A written undertaking from a bank on behalf of a client to pay a supplier or seller if the client breaches their contract. Includes Tender Bonds, Performance Bonds, Advance Payment Guarantees, and more [citation:1][citation:8].

Best for: Contractors and project-based businesses

Bills for Collection

Handling documents forwarded by the remitting bank to deliver them against payment (DP/CAD basis) or acceptance (DA basis) [citation:1][citation:10].

Best for: Exporters seeking secure payment collection

Working Capital Financing Solutions

Tailored facilities to meet your day-to-day operational liquidity needs.

Borrowing Base Facilities

Financing based on eligible accounts receivable and inventory. Ideal for businesses with high working capital cycles [citation:9].

Warehouse Receipt Financing

Finance against stored commodities or goods held in certified warehouses. Unlock liquidity from physical inventory [citation:9].

Invoice Discounting & Factoring

Convert unpaid invoices into immediate working capital. Improve cash flow without waiting for customer payments [citation:1].

Structured Commodity Finance

Pre-export and pre-payment finance for commodity traders and producers. Supports cross-border commodity flows [citation:9].

Eligibility & Financing Limits

Understanding the criteria UAE banks use to evaluate trade working capital applications.

Criteria	Requirements
Minimum Business Vintage	Typically 1-3 years of trading history [citation:5]
Minimum Annual Turnover	AED 5 Million to AED 45 Million for SME facilities [citation:5]
Financing Amount (Collateral-Free)	Up to AED 2 Million for working capital finance [citation:5]
Financing Amount (Secured)	Up to AED 50-75 Million for trade facilities [citation:9]
Minimum Length of Business	Some banks offer simplified working capital with no financial statements required [citation:3]
Credit Bureau Requirements	No default history on Al Etihad Credit Bureau reports [citation:5]
Sharia Compliance	Islamic trade finance products available (Murabaha, Wakala structures) [citation:2][citation:8]

Digital Trade Finance: HSBC TradePay

A simplified, digital trade finance solution that empowers you to draw your loan and make just-in-time payments to suppliers immediately [citation:7].

Key features:

⚡ Instant loan drawdown and supplier payments
📱 No need to submit transactional documents for each drawdown
💻 Fully integrated into HSBCnet platform
🎯 Just-in-time financing to control borrowing costs
📧 Automatic loan and payment notifications

Perfect for: Seasonal demand, rapid scale-ups, and precision timing challenges [citation:7].

Required Documents

Prepare these documents to streamline your trade working capital application.

Business Documents

• Trade License
• Memorandum of Association (MOA)
• Share Certificate
• VAT registration certificate [citation:5]

Financial Records

• Audited financial statements (2-3 years)
• Bank statements (12 months)
• Interim financial reports [citation:5]

Personal Documents

• Passport copy of signatories/partners
• Emirates ID
• Residence visa copy [citation:5]

Trade Documents

• Proforma invoices from suppliers
• Purchase orders / contracts
• Bill of lading (for import financing)

Why Choose Trade Working Capital?

Unlock the advantages of structured trade finance for your business.

Faster Growth

Access working capital to fund seasonal inventory, scale operations, and seize new market opportunities without cash flow constraints [citation:7].

Stronger Supplier Relationships

Make timely payments to suppliers, negotiate better terms, and build trust with automatic payment notifications [citation:7].

Controlled Borrowing Costs

Just-in-time financing lets you borrow the exact amount needed when payments are due, keeping interest costs under control [citation:7].

Global Reach

Access multi-currency, cross-geography financing through extensive international banking networks [citation:7].

Frequently Asked Questions

Get answers to common questions about trade working capital in the UAE.

What is the difference between a Letter of Credit and a Letter of Guarantee?

A Letter of Credit (LC) is a bank's undertaking to make payment to a beneficiary (supplier) once all terms and conditions are met. A Letter of Guarantee (LG) is a bank's undertaking to pay a beneficiary if the bank's client (you) breaches a contract. LCs are primarily for payment assurance in trade transactions, while LGs are for performance or bid security [citation:1].

Can startups get trade working capital finance?

Most banks require a minimum trading history of 1-3 years for traditional trade finance facilities. However, some banks offer simplified working capital solutions with no financial statements required, which may be accessible to newer businesses [citation:3]. For startups, collateral-free finance up to AED 2 million may be available with a 3-year business vintage [citation:5].

Is Islamic trade finance available?

Yes, several UAE banks offer Sharia-compliant trade finance solutions. These include Murabaha (cost-plus sale), Wakala, and Ijara structures for Letters of Credit, Trust Receipts, and Letters of Guarantee [citation:2][citation:8]. The financing is based on profit rates rather than interest, with full Sharia compliance certification.

How long does trade finance approval take?

Approval times vary by product. Digital solutions like HSBC TradePay offer instant loan drawdown upon approval [citation:7]. For traditional facilities, initial approval can take 2-4 weeks depending on documentation. Once approved, facility disbursement must typically be completed within 30 days of approval [citation:2].

What is Supply Chain Finance (SCF)?

Supply Chain Finance is a form of financing that optimizes working capital across a business's supply chain. It includes dynamic discounting (early payment discounts), receivable finance, and payable finance. SCF helps both buyers and suppliers by improving payment terms and unlocking liquidity tied in the supply chain [citation:1][citation:9].

What are the costs associated with trade finance?

Costs typically include profit/interest rates (benchmarked to EIBOR), processing fees, LC issuance fees (0.1-0.5% of LC value), amendment fees, and correspondent bank charges for international transactions. Additional fees may be levied by correspondent banks, and penalties may apply for errors in providing information [citation:1].

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