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Removing barriers to crossing borders: Five questions to ask when trading internationally
Trading internationally is a route to growth, yet for many UK businesses this can be challenging to navigate. From unfamiliar rules to fluctuating foreign exchange rates, here are five questions to help you navigate.
Read time: 6 mins Added: 10/07/26
Trading internationally is a route to growth
Expanding into international markets can unlock new and unique opportunities, enabling businesses to grow beyond the capacity of the UK’s domestic economy and ultimately broadening their horizons. It’s also the perfect time to consider international growth – in the final quarter of 2025, 21% of large exporters (PDF, 1MB), more than 250 staff, increased their export orders and in April 2026, 63% of firms reported that they expect output to strengthen in the next 12 months.1
Yet for many UK businesses, this can be a voyage into the unknown. Unfamiliar rules, opaque payment journeys, fluctuating foreign exchange rates, documentary complexity, and varying costs are just some of the factors that can be difficult to navigate.
This is where support from a financially strong bank, with extensive knowledge, expertise and a holistic suite of international payment and trade solutions, is essential. Ideally, it should also be a relationship that can underpin each transaction - mitigating FX and trade risk, and ensuring timely and reliable payments, while also supporting your working capital requirements and providing clarity and visibility across the entire journey.
Here are five questions to consider when trading internationally.
1. How can I protect my business if things go wrong?
Recent research by the International Chambers of Commerce found that uncertainty is the top concern among businesses, cited by 74% of firms.
Risks are varied. Exchange rates can move between order, shipment, and payment, and can erode margins as a result. A profitable deal can quickly become commercially challenging if foreign exchange (FX) rates move unfavourably. In addition to this, political instability, regulatory changes, and documentation fraud can present risks that have financial, logistical, and commercial consequences. Working in collaboration with Lloyds, the British Chambers of Commerce (PDF, 1MB) recently found that customs procedures and documentation (45%), regulations and standards (35%), FX rates (21%) and political risks (14%) were among the top factors cited by businesses as barriers to trade.
Lloyds can help to mitigate the risk of things beyond your control affecting your international transactions. From FX tools that help to quantify risk, support visibility, provide certainty over pricing and protect margins, through to structured solutions that reduce counterparty risks. We play a central role in helping businesses manage this uncertainty. This includes enabling firms to hedge currency exposures, gain insight into country and counterparty risk, and address operational and regulatory complexity.
2. Can I be sure that I’ll get paid for the goods I ship, or receive the goods I pay for?
International trade could add an extra element of risk to any transaction, and both parties are required to trust that the process will proceed as planned. While for the most part, the process is simple and straightforward, issues can arise. A delayed shipment, for example, can trigger a payment dispute, while a payment failure could prevent the timely release of goods.
A lack of understanding of the business environment in which your buyers and suppliers operate in could also cause issues. Unfamiliar customs and laws in foreign jurisdictions could cause communication problems, delays, or misunderstanding, while making overall buyer or supplier reliability more difficult to assess.
Lloyds can act as an intermediary between your business and your international buyers or suppliers to mitigate risk and ensure that contracts are fulfilled as agreed. We offer a range of tools – from Letters of Credit and Standby Letters of Credit to Bonds, Guarantees, Documentary Collections and more, all of which guarantee that the terms of each transaction will be completed as specified. Clear terms, structured transactions, and strong risk mitigation can ultimately help you trade with confidence.
3. Can I afford to trade internationally?
While it unlocks new opportunities and can boost a business’ competitiveness, without the right support, international trade could come with a higher price tag than its domestic equivalent. Costs can arise from multiple sources, from currency movements to intermediary fees, documentary charges and longer working capital cycles.
The impact of extended payment terms in particular can put significant financial pressure on a business as they look to buy materials or process goods to fulfil contracts before the customer has paid. What’s more, when costs are unclear, accurate forecasting becomes increasingly difficult.
Access to foreign currency accounts and trade finance through your bank can help maintain the right level of working capital throughout the trade cycle and ensure that your business has the cash it needs, when and where it needs it.
Some forms of trade finance can help you to secure the funds you need to fulfil contracts, whereas others can help to improve supplier relationships by enabling upfront payment, and the ability to negotiate better terms, pricing, and flexibility. Lloyds can help by giving you the tools to forecast effectively and manage your cash flows and FX risks in both sterling and foreign currencies.
4. How difficult will the process be for my business?
International trade may seem complex to businesses used to operating domestically. Firms may be daunted by additional requirements – from trade documentation through to differing regulatory standards and cross-border payment processes.
However, it’s simpler than you may think and these additional layers of process do not need to represent a barrier to trade. Much of this complexity can be managed with the right support and infrastructure. Lloyds can help guide businesses through the required documentation and provide expertise on processes and managing risks. We can also support with predictable international payments, often in a wide range of currencies, underpinned by effective validation, straight-through processing, and an extensive partner bank network. Transparency can also be provided via online tracking, enabling visibility of any challenges and providing suppliers with confidence of payment delivery.
Additionally, the digitalisation of trade and payments are increasingly simplifying existing processes. The introduction of the Electronic Trade Documents Act in 2023 has resulted in the transition from paper-heavy processes to cheaper, faster, simpler, and more sustainable digital equivalents. Digitalisation has reduced processes that used to take days or weeks to just hours or – in some cases – as little as 20 seconds. For payments, the migration to ISO 20022 supports enhanced straight-through processing and delivers improved data.
5. Do I have oversight and control when trading starts?
When payments and trade documentation span multiple banks, intermediaries, time zones, and document checks, it can be difficult to see where a transaction sits at any given moment. It can also be difficult to gain a clear understanding of costs when operating across countries and currencies.
Lloyds can help to bring hidden costs out into the open and make them avoidable through transparent fee structures, clear FX execution and hedging options, and a reliable view of the entire end-to-end process. Digital workflows provide clearer visibility of where payments and documents are in the process, including when they will arrive, the values and currencies expected, and any required actions.
Make the world your marketplace
Lloyds is focused on UK businesses – wherever they are trading in the world. We provide the bridge between domestic strength and international opportunity by offering a one-stop shop for all of your international trade requirements. We’re focused on catering to your international needs by connecting trade finance with international payments and FX risk management solutions in one holistic model, underpinned by our dedicated, specialist support, based regionally across the UK, to guide you through each step of the process.
This ensures that risk mitigation, working capital support and settlement operate as a single, integrated model. What’s more, innovation is at the heart of our approach. Innovation matters when it reduces failures, shortens cycle times, improves data quality, and streamlines processes - enabling our customers to spend less time on manual tasks and more time on the decisions that matter.
As a financially strong institution, we’re actively investing in our capabilities, enhancing the service we offer, and finding new ways to boost your international trade activities. Our aim is to make your international ambitions feel more like plain sailing, and less like rough seas.
Read more about how our international offering – from trade and payment support to FX management – can support you in either beginning or continuing your international journey.
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