Most growing businesses that trade across borders solve two problems separately. They arrange finance with one provider and convert currency with another, often a bank, and the two never really meet. Handled apart, they leave a gap that quietly costs money on the same transaction. This piece makes the case that for a business with both a funding need and a currency exposure, the two belong in one conversation, and explains why. It is part of our wider guide to business finance and currency. Medlock & Thames is a finance broker and a currency broker, so this is general information rather than advice.
Why are finance and currency usually handled separately?
Mostly out of habit and structure. Lenders lend and currency firms convert, and the two have traditionally sat in different places, even inside the same bank. A business ends up running two relationships that do not talk to each other: one that knows the funding but not the currency exposure, and one that quotes a rate without seeing the underlying deal. Nobody owns the whole transaction, which is precisely where value leaks.
What does that separation cost?
More than most businesses notice, because the cost hides in the rate rather than the fee. Consider an importer that wins a competitive trade facility to fund a stock order, then converts the euro payment through its bank on the day the supplier is due. A good facility can be undermined by a poor rate and a wide spread on the very same payment, and the saving won on the financing is handed back on the currency. The separation also doubles the admin and the timing risk, because two providers are each working to their own clock.
Where do the two actually meet?
On the same transactions, again and again. An importer funding stock pays the supplier in a foreign currency. An exporter financing a foreign currency invoice, through invoice finance, has proceeds that convert back to pounds. A business using trade finance for an overseas order, servicing debt in another currency, or funding expansion abroad, faces a financing cost and an exchange rate on the same flow of money. The finance and the currency are two sides of one transaction, not two separate problems that happen to land together.
What does joining them up look like in practice?
One brief, given once, to a provider that can see both halves. The funding requirement and the currency exposure are taken together, the facility is arranged and the rate on the related payment can be fixed in step, and the timing is aligned so the money is there, in the right currency, when it is needed. A single point of contact who understands the whole transaction replaces two relationships that each see only part of it. The decisions remain the business's own; what changes is that they are made with the full picture in view.
Is this only for large companies?
If anything, smaller businesses feel it most, because they have less margin to absorb a surprise. A move of three to five per cent on a financed order, well within a normal year for sterling, can erase the profit on the deal for a business that did not see it coming. Large corporates have treasury teams to join the dots; a growing SME usually does not, which is exactly why having one provider see both sides matters more, not less.
According to Medlock & Thames
Because we sit on both sides of this, the pattern is hard to miss: a business celebrates a sharp funding deal and then quietly gives a chunk of it back on the conversion, because the two were arranged in different rooms. The fix is not clever, it is structural. When the funding and the currency are decided in the same conversation, the margin a business planned on a deal is far more likely to be the margin it keeps.
Frequently asked questions
Doesn't my bank already do both?
A bank may offer both, but lending and currency are often handled by separate teams, and bank exchange rates can carry a wide spread on the payment. The point is not simply having both under one roof, it is having them coordinated on the same transaction at a competitive rate.
Can Medlock & Thames really handle both sides?
Yes. We are a finance broker, placing requirements across a panel of lenders, and a currency broker, with FX executed through FCA authorised partners that safeguard client money. That is what lets the funding and the currency be handled together. You can read about the currency service on our corporate currency page.
Is this financial advice?
No. This is general information about how funding and currency interact. Medlock & Thames does not provide regulated financial advice, and any decision on finance or currency rests with the business and, where it wants formal advice, its own advisers.
Related articles
This piece is part of our Business Finance series. For the overview, read our guide to business finance and currency. For the individual options, see invoice finance explained and trade finance and working capital finance. For the currency side, read FX hedging for finance directors, or visit our corporate currency page.
