A timing difference always exists between when a product is delivered and when a payment is made (unless when paid in cash).  Trade finance intermediates and moderates this timing gap.  This timing gap can be from a few days up to multiple years.  Trade finance's deal duration occurs during this timing gap period, typically within 120 days.  

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Trade finance can be used by a Seller such as in receivable finance, inventory finance or pre-export finance.  By a Buyer, payable finance can be used.  By both a Seller and a Buyer simultaneously, documentary letter of credit can be used.       

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Unlike a corporate loan in which two parties (borrower and lender) are engaged, trade finance requires three parties (seller, buyer and lender).

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The Seller's main interest is to receive payment safely on the shortest possible payment term.  The Buyer's main interest is to receive non-defect goods on the longest possible payment term.  Trade finance moderates these two differing interests.    

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The Borrower of trade finance achieves better working capital management and increased efficiency in short term assets (receivables and inventory) and liabilities (payables). The Borrower also can mitigate counterpart risk.  

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