Online Trade Finance Service Targets SMEs
A UK-based trade finance service, TradeRiver, has launched which aims to provide small and medium sized enterprises (SMEs) with a pre-approved revolving credit facility to finance trade with their suppliers via a secure online platform.
The new service provides buyers, at any point in the supply chain, with immediate access to up to £500,000 of credit which they can use to pay their suppliers for goods and services. Once buyers and sellers are set up on the TradeRiver platform called STEPS, payments and administration are paperless. Buyers are in control of their credit line and when they accept the obligation to pay, suppliers receive immediate payment in full, wherever they are in the world, on a non-recourse basis.
“Without sufficient working capital, managing a supply chain can be a real headache and can stunt a company’s growth,” said Richard Fossett, co-founder and chief executive officer (CEO). “Being in the negotiating position of a cash buyer is a significant advantage in the current market and by managing all suppliers online, buyers can cut out paperwork and focus on what really matters – growing their business.
“The way businesses trade with one another has changed considerably, but trade finance has been slow to catch up. Too often, businesses find it difficult to arrange, inflexible and costly. TradeRiver will inject some much needed competition into the market.”
TradeRiver charges buyers using the platform a single fee that reflects the size of the facility and the length of the credit period which can be up to 120 days. The firm said that the typical cost is £4 to £5.50 per £100 borrowed with no set-up, registration or non-utilisation fees.