Trade Finance Ireland: How Importers Fund Stock, Deposits and FX (2026)

Your overseas supplier quotes $150,000 for a container. They want 30% with the order and the rest before the ship leaves port. Six weeks at sea, a few days clearing customs in Dublin or Cork, then two or three months to sell it all through.

By the time your own customers pay you, you've been out of pocket for the best part of half a year.

That's the importer's cash cycle. It's why a profitable Irish wholesaler, retailer or distributor can be short of cash every single time it grows. And no, the supplier in Shenzhen who's never met you isn't going to offer you 90-day terms. This guide is for Irish businesses buying from abroad. We'll cover the tools that actually get used in 2026 (letters of credit, documentary collections, import loans and supplier payment facilities) plus the two costs that catch importers out: currency swings and the cash you hand over at the port.

What Trade Finance Means for Irish Importers

Trade finance is a family of products that fund or secure goods moving across borders. For an importer it does three jobs. It reassures your supplier they'll get paid. It funds that payment before your customers have paid you. And it can protect you from the exchange rate moving against you in between.

It gets mixed up with two close cousins, so let's clear that up in one breath each. Trade credit is time to pay that your supplier gives you directly, and it's the cheapest money there is once you've earned it. Purchase order finance funds the cost of fulfilling one specific confirmed customer order. Trade finance is broader: it funds your stock buying, whether or not you've a named buyer lined up yet.

Most importers we work with move through the tools in stages. A letter of credit for the first deals with a new supplier. Documentary collections once there's some trust. An import loan to fund the actual payment. And eventually open-account terms once the relationship's mature.

Selling abroad rather than buying? That's a different problem with different tools, and we cover it in export finance in Ireland.

The Importer's Cash Gap: Mapping a Real Container

Before you pick a product, map your cycle. Here's a typical $150,000 import from Asia, at an illustrative rate of 1.15 dollars to the euro (about €130,400).

So you're out roughly €145,000 before a euro comes back if you use postponed accounting. Without it? Nearly €178,000.

Two things jump out. The big hit is the balance at shipment, not the deposit, and that's where an import loan or letter of credit earns its keep. And that VAT line is pure cash flow. You'll reclaim it, sure, but if you pay it at the port you're lending Revenue €33,000 for weeks. We'll come back to both.

Letters of Credit: Paying a New Supplier Without Paying Blind

A letter of credit (LC) is your bank promising to pay your supplier once they hand over specific documents: usually the invoice, packing list, the bill of lading proving the goods are on the ship, and any certificates of origin or inspection. LCs run under the ICC's UCP 600 rules, which is why a supplier in Asia and a bank in Dublin can rely on the same terms.

Your supplier gets a bank's promise instead of yours, so they're happy to ship. You only pay once the goods have actually shipped on the terms you agreed. Bank of Ireland and AIB both issue import LCs for business customers.

Here's the catch. Banks deal in documents, not goods. If the documents match the LC exactly, the bank pays. If they don't (a misspelt company name, a late shipment date, a missing certificate), there's a "discrepancy" and payment stalls until it's sorted. Discrepancies are common, and the LCs we see go wrong were usually drafted loosely or copied from an old deal.

What works:

• Agree the LC wording with your supplier before the bank issues it.
• Keep the document list short and achievable.
• Use Incoterms (FOB, CIF and so on) that match who's arranging freight and insurance.
• Build a realistic buffer into the latest shipment date.

How much does a letter of credit cost? Expect an issuing fee, usually a percentage of the LC value, plus amendment and handling charges. LCs also use up credit, because the bank treats them as lending to you. Smaller importers are often asked for cash cover or security until they've built a record.

Documentary Collections: The Cheaper Middle Ground

Once you and a supplier trust each other a bit, a documentary collection is the lighter option. The supplier ships, then sends the shipping documents through their bank to yours. Your bank only releases those documents, which you need to collect the goods, when you pay (documents against payment) or sign a bill promising to pay on a set date (documents against acceptance).

Collections run under the ICC's URC 522 rules and cost less than an LC. But the banks are messengers, not guarantors. Nobody's promising payment. The supplier's protection is that you can't get the goods without paying or signing.

For a second-year supplier relationship, it's usually the sensible step.

Import Loans and Supplier Payment Facilities: Funding the Balance at Shipment

LCs and collections secure the payment. They don't fund it. That's what an import loan is for.

An import loan is a short-term advance, often 90 to 180 days, drawn to pay a specific supplier invoice or LC and repaid when the goods sell. Banks offer these inside a trade facility for established customers, matched to how fast your stock turns.

Specialist supplier payment facilities go a step further. The provider pays your overseas supplier directly, and some will also cover freight, duty and VAT, with you repaying once the goods land and sell. Bibby Financial Services Ireland has offered a product like this with SBCI backing for SMEs buying goods for resale, so ask which SBCI-supported options are open when you apply.

Holding stock for longer, like furniture, machinery or seasonal lines? A stocking loan funds inventory sitting on the shelf rather than on the water.

And once you sell those goods to business customers on credit, the squeeze moves to the other side of the ledger. That's where invoice finance releases cash from your invoices. Plenty of Irish distributors run both, which funds the whole cycle from order to collection.

FX Risk on Dollar and Sterling Purchases: The Cost Nobody Budgets For

Buying from Asia? You're probably paying in dollars. From Britain, likely sterling. But you sell in euro. Between agreeing a price and paying for it, the rate moves, and your margin moves with it.

On that $150,000 container, if the euro slips from 1.15 to 1.10 dollars before you buy the dollars, your stock costs about €5,900 more. On a 25% gross margin, that's a real chunk of the profit on the whole shipment, gone before it leaves port.

You've three main options:

1. Forward contracts. You agree today the rate you'll buy dollars at on a future date. The pillar banks and FX specialists like Fexco offer them. You give up any lucky gain, but your margin is fixed the day you order.
2. Currency accounts. Hold dollars or sterling and pay suppliers from that, which works well if you also earn in those currencies.
3. Pricing in euro. That pushes the risk onto your supplier. Some will accept it, usually for a slightly higher price.

Our view is simple. Price the shipment at a rate you can lock, then lock it. Hoping the rate goes your way isn't a strategy. It's a bet.

Post-Brexit Customs and Postponed VAT Accounting for Importers

Since 1 January 2021, goods arriving from Great Britain are imports, with customs declarations, possible duty and import VAT, just like goods from Asia or the US. Goods from Northern Ireland are different: they stay inside the EU VAT system for goods and aren't imports for this purpose.

The lever most importers underuse is postponed accounting. Revenue's scheme, in place since 1 January 2021, lets traders registered for VAT and for Customs and Excise account for import VAT on their VAT return instead of paying it at the border. You declare it and reclaim it on the same return, so the net cash hit is usually nil. On our container, that's €33,000 that stays in your account. Revenue can exclude traders who don't meet the conditions, so keep your tax affairs clean, and ask your accountant or customs agent to confirm your setup.

Customs duty is a real cost, not a reclaimable tax. It's normally paid on import unless you have a deferred payment arrangement with Revenue, and that needs a customs guarantee, which is often provided by a bank. That's trade finance too.

One trap we see again and again: goods that genuinely originate in the UK can come in duty free under the EU-UK Trade and Cooperation Agreement, but only with valid proof of origin. Goods made in Asia and shipped to you through a British warehouse don't qualify. Plenty of Irish retailers who buy from UK wholesalers learned that the expensive way.

What Lenders Need to See Before Funding Your Imports

Whatever product you use, lenders want to understand the trade, not just your accounts. Bring them:

• Supplier history: how long you've bought from them, defect and return rates, and the Incoterms you trade on.
• Sell-through evidence: how fast your stock turns and your gross margin, ideally straight from your stock system.
• Who buys from you: because that's where the repayment comes from.
• Insurance: marine cargo cover for goods in transit.
• The basics: tax clearance, up-to-date CRO filings, a clean Central Credit Register record, and VAT and customs registrations in order.

Sometimes the smartest move is a working capital buffer that lets you pay deposits from your own account and negotiate better prices. Our fixed term loans of €30,000 to €300,000 over 12 to 48 months can do that, with fast decisions. And if you're an online or retail importer taking card payments, revenue-based lending flexes with your sales, so a slow month costs you less. Our guide to e-commerce financing covers that side in more detail.

Fund the Full Import Cycle From Deposit to Customer Payment

Trade finance works best when you map your real cash cycle first and then match a tool to each stage. An LC or collection to secure the supplier. An import loan to fund the balance. A forward contract to fix the currency. Postponed accounting to keep VAT out of the picture. Invoice finance once you're selling on credit.

Get those pieces in place and growth stops being a cash problem. The next container becomes a margin decision, not a test of whether your bank account can survive it.

Frequently Asked Questions