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Trade Finance: Overview, How It Works, Example

By Kristi Waterworth – Jun 25, 2025 at 8:37PM | Fact-checked by Frank Bass

Key Points

  • Trade finance reduces payment and delivery risks in international transactions.
  • Letters of credit are key tools in trade finance, ensuring payment upon delivery.
  • Effective trade finance is vital for companies that depend on global trading.
Key findings are powered by ChatGPT and based solely off the content from this article. Findings are reviewed by our editorial team. The author and editors take ultimate responsibility for the content.

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