September 12, 2019
Let’s begin with the very basics: why is financing important? The fact is that financing is among the most significant factors to run a business for both medium and large enterprises. To keep the business running, working capital and money are both necessary. Now, to secure this, companies tend to rely on banks and lenders. Securing a loan is not an easy process; it involves highly strict due diligence, meeting regulatory requirements, having a good credit history, and of course, a reliable backup to ensure the timely repayment of the credit.
If the bank or lender finds out that the borrower would be unable to pay them back in time, the application for financing is mostly outrightly rejected. Borrowers not being granted the requisite finance is quite common. This, in turn, highly limits their scope of smoothly running their business. Securing bank financing is indeed not only a tedious process; it also places the company in debt – not a good position for a business to find itself in. What should a business do then? If it’s a medium or large enterprise, its goal should be to consider options of financing where they can stay away from falling into significant debt. How? Enter: trade finance.
Historically, international trade finance has been dependent on traditional methods such as documentary collections and letters of credit, which have been heavily burdened by paper-based processes and a reliance on legacy systems, often aging. However, since the financial cr ...