Pre-Shipment Finance UK 2026

Market Invoice is an independent UK invoice finance comparison site that lists 83 UK invoice finance providers in its directory (76 still trading) and compares 27 of them on full published terms.

Pre-shipment finance is UK trade finance that funds the production cycle between receiving a confirmed order and shipping the goods. It is used by exporters, contract manufacturers and importers who need to buy raw materials or pay manufacturing labour before they have an invoice or a delivered shipment to fund against. Specialist trade finance lenders, and brokers such as Trade Finance Global, arrange pre-shipment facilities (Stenn, a former export finance specialist, entered administration in December 2024, joint administrators Interpath Advisory). Advance rates and fees are quoted per deal and reflect the production risk the lender takes on; the facility is repaid when the buyer pays the post-shipment invoice.

What this page covers

This page covers

pre-shipment finance UK: production-cycle funding for exporters and manufacturers, LC-backed structures, where to look for a lender

Not covered here

General invoice finance education (see /guides/), individual provider reviews (see /providers/), full pricing breakdown (see /guides/costs/)

Where to look for a lender

We do not have published terms for any UK pre-shipment lender to show you. Start with your bank's trade finance team, especially if your buyer pays by letter of credit, or a trade finance broker such as Trade Finance Global, which can approach several lenders. Invoice finance lenders fund the invoice once the goods have shipped, so they help with the second half of the cycle, not production.

Related finance

Pre-shipment finance pairs with purchase order finance and, for overseas trade, export finance and import finance.

AP

Adam Parker

Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd

Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.

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Pre-Shipment Finance UK FAQ

What is pre-shipment finance?

UK trade finance that funds production costs (raw materials, labour, freight) between receiving a confirmed order and shipping the goods. The lender advances against the confirmed order; you produce and ship; the buyer pays the invoice; the lender repaid principal plus fee.

Pre-shipment vs post-shipment finance?

Pre-shipment funds the production cycle (order to ship). Post-shipment funds the payment cycle (ship to payment). Many UK exporters use both: pre-shipment to fund production, post-shipment (invoice finance) to fund the 30-90 day payment terms. Combined, they cover the full order-to-cash cycle.

Who uses pre-shipment finance UK?

Contract manufacturers winning large export orders, food and drink exporters with seasonal production, fashion brands fulfilling wholesale orders, OEM electronics manufacturers, and importers buying from overseas suppliers under letter of credit. Anyone with a confirmed order whose production cost exceeds their working capital.

How does pre-shipment finance work with letters of credit?

On letter of credit (LC) backed exports, pre-shipment finance is often structured as 'packing credit' or 'red clause' financing. The LC issuing bank or a specialist trade finance lender advances funds against the LC itself, with the LC providing security. Once goods are shipped and documents presented to the LC bank, the LC pays the original lender and the exporter receives any balance. Used heavily for exports to emerging markets where end-buyer credit isn't directly bankable.

Best pre-shipment finance providers UK?

Bibby Financial Services lists pre-shipment and purchase order trade finance in its own trade finance guide, and Trade Finance Global (a broker across multiple lenders) is another starting point. For LC-backed transactions, the trade finance teams of the major UK banks are the usual route. Invoice finance lenders fund the invoice after the goods ship, not the production before it. Stenn is no longer an option: it entered administration in December 2024. Get more than one quote.

Cost of pre-shipment finance UK?

Fees are quoted per deal. Effective APR depends on production-to-payment cycle length: as an illustration, a 3% fee on a 60-day cycle equals roughly 18% APR. Arrangement fees on facility setup may apply too. Expect it to cost more than invoice finance, because the lender takes on the risk that production goes wrong.