What is Speculative Purchasing?

Often in Trade Finance the term Speculative Purchasing comes up. So what is it exactly? I sat down with Daniel and asked him just that! 

So Daniel, often i hear the term ‘Speculative Purchasing’. What is it exactly and why is it a big no no in obtaining a Trade Finance facility?

Well speculative Purchasing in reference to what we do is when you buy stock for your inventory that is not pre-committed or pre-sold to your customers. So a lot of businesses ,yes they do require that kind of  inventory where they’ve got an idea of what they are going to sell over the next 3 months but they don’t have batton down orders for it, we refer to that as ‘Speculative’ but that’s not something we can fund.

Well that was short but sweet! Thanks Daniel

If you have a question you would like answered, whether its on Trade, Invoice or Import finance feel free to submit your questions to me at [email protected] and i will have Daniel answer in next weeks blog post!