As private credit emerges as one of the fastest-growing areas of global capital markets, its reach is now extending into trade finance. Enrique Rico, global head of trade and working capital at Santander CIB, explains how the bank is leveraging partnerships, technology and innovative structures to expand liquidity and optimise working capital.
The world of trade finance has faced waves of significant disruption in recent years, driven by geopolitical events, supply chain disruptions, the collapse of major trade fintechs, waves of digitalisation and the rise of full-service bank providers taking charge of the ecosystem.
Within the last year, the spotlight of the trade industry has moved away from the world of fintechs and onto the newest exciting development: the entrance of private credit to trade finance and working capital.
Santander has been at the forefront of each wave of innovation in recent years. We have developed proprietary, market-leading platforms to meet the bespoke needs of each client; built world-class distribution mechanics and launched new products – such as inventory finance and buy now, pay later (BNPL) – ahead of the market; and equipped our sales teams with deep specialist sector knowledge to act as true advisors to clients.
In the current environment, Santander is once again taking the lead by building partnerships with private credit to further enhance our client offering. These partnerships allow us to leverage private credit’s strengths and regulatory efficiencies to support Santander’s goals in the trade finance industry, providing greater support to a wider range of companies. Private credit is also a useful tool for taking the junior tranche on facilities. At the same time, private credit benefits from Santander’s client relationships and global reach as a leading trade finance bank.
In recent years, private credit has emerged as one of the fastest-growing areas of global capital markets, with its reach now extending into trade finance. Traditionally the preserve of banks, multilaterals and specialised funds, trade finance is increasingly attracting private credit managers seeking new deployment opportunities.
A number of factors have driven this shift, including regulatory capital constraints on banks and corporates seeking more diversified, flexible financing options in response to global supply chain disruptions, persistent inflationary pressures and higher interest rates.
Private credit managers are seeking asset classes that offer both yield and resilience, and trade finance – with its short duration and self-liquidating structures – is increasingly viewed as a natural fit. Santander continues to explore ways to innovate and enhance our client offering, adding private credit partnerships as part of our strategy to become the number one trade bank globally.
Private credit funds are now allocating capital to trade finance portfolios, bringing greater liquidity to corporates, particularly in underserved markets where traditional lenders have scaled back exposure.
Invensa: A new model for inventory finance
Hybrid structures involving both banks and funds are becoming increasingly common, with banks originating trade finance assets that are then distributed to private credit vehicles. In this area, Santander has established itself as a market leader, connecting real company needs with private credit capital through innovative structures.
One example is Invensa, Santander’s joint venture with Pemberton Asset Management, which combines Santander’s banking expertise with Pemberton’s private capital resources to deliver flexible, scalable inventory finance solutions. This approach enables companies to source and store inventory off-balance sheet, enhancing procurement flexibility and reducing inventory holding costs.
Invensa is more than a financing structure; it is a fully operational platform that integrates directly into clients’ supply chains. By combining financial capacity with execution capabilities in procurement, logistics and risk management, it positions itself as a genuine partner rather than a passive provider of capital. This operational dimension helps corporates unlock efficiencies, reduce bottlenecks and gain transparency across the movement of goods.
A key differentiator is its technology layer. Invensa’s platform provides real-time oversight of inventories and shipments, supported by data analytics that enhance forecasting and enable early risk identification. For corporates, this visibility is critical in navigating today’s volatile markets and making informed purchasing decisions. At the same time, the structure allows companies to hedge against inflation and secure strategic supplies without compromising liquidity.
The partnership between Santander and Pemberton also reinforces trust in the model. Santander contributes its global trade finance expertise and institutional credibility, while Pemberton brings flexibility and depth in private capital. Together, they deliver scale and reliability rarely found in privately owned inventory companies. In effect, Invensa offers clients resilience, financial efficiency and the assurance of working with a well-capitalised, long-term counterparty.
Santander has also built a partnership with another leading private equity fund to finance receivables and supply chain structures. This initiative has been partly driven by Santander’s significant progress in the financial sponsor/portfolio company space, where businesses tend to be more highly leveraged, carry weaker credit ratings and involve smaller deal sizes than the traditional focus of trade finance banks.
By combining its strengths in financial sponsors and leveraged finance with market-leading trade finance capabilities, Santander has worked with companies across mergers, leveraged buyouts, spin-offs and other situations to provide continuity of facilities, optimise working capital, offer alternative funding sources and increase internal rates of return on transactions.
Case study: A custom SCF programme for a global packaging company
Santander created a tailored supply chain finance (SCF) programme for a multinational packaging company facing a clear challenge: it wanted to free up working capital but could not take on additional senior secured debt.
Santander’s solution was to design an asset-backed SCF structure that sat outside the company’s main lending agreement. By using inventory and fixed assets as collateral, the company gained access to scalable funding while opening the door for private credit investors to participate.
This approach not only improved the company’s working capital but also provided a model for future solutions.
Why choose Santander?
Santander CIB offers:
- Global reach and product expertise across all trade finance needs
- Strong relationships with private credit investors to expand funding options
- Customised, multi-funder structures that enhance flexibility and scale
- Deep sector insights tailored to client-specific supply chain issues
- Increasingly driving the industry in embedded finance which is sure to grow in importance and relevance
As trade and working capital demands grow more complex, Santander provides the tools and partnerships companies need to stay competitive.
