A trade finance platform is software that arranges the letters of credit and export loans that let an exporter ship goods and be sure of being paid. Trade finance is the money and the bank promises that make international trade possible.
Here is the problem it solves. An exporter does not want to ship goods to a buyer abroad and then wait, hoping to be paid. The buyer does not want to pay before the goods have been shipped. Neither knows the other well.
A letter of credit (LC) solves this. It is a bank's written promise to pay the exporter, once the exporter shows documents proving that the goods have been shipped. The buyer's bank issues it. So the exporter relies on the bank's promise, not on the buyer's.
Take, for example, a leather-goods exporter in Kanpur that receives an order for bags worth $50,000 from a buyer in Germany. The buyer's bank issues a letter of credit. The exporter now needs cash to buy leather and pay its workers. So its Indian bank gives it export credit: a loan to fill the order, repaid from the export payment. It is also called packing credit. The exporter makes the bags and ships them. The shipping company issues a bill of lading, the receipt for the goods and the proof of who owns them. More and more, this is an electronic bill of lading. The exporter's bank sends the documents to the buyer's bank. The buyer's bank checks them and pays. The money often passes through other banks on the way, which is called correspondent banking.
The platform keeps all of this in one place. It receives the shipping documents from freight forwarding software. It checks every party against the sanctions lists through sanctions screening. It tracks each document and each payment. It also lets the exporter compare offers from several banks for the letter of credit or the export credit.
Trade finance is a form of working capital: it covers the time between buying materials and being paid. It differs from cross-border payment collection, which only receives the money from abroad. Trade finance also gives the exporter a promise of payment and a loan before shipping.