Logistics Know How

Trade Finance – Helping small businesses grow fast in a global economy

Setting up a small or medium-sized business (SME), watching it grow and finally taking it global is a tough and challenging process that requires a lot of determination, effort and patience. From our experience working with small businesses, we know that having a strategy in place, alongside the right partners, is crucial to growing your business. Finances are a crucial part of any strategy – and trade finance companies can be essential partners in helping you obtain working capital to help your business grow. But what is trade finance? Well, Twill is hosting a webinar on this topic, offering insights and guidance – which you can register to join today. But to get you started, let’s explore the challenges and how trade finance can help.

25 January 2021

25 January, 2021

The ongoing COVID-19 pandemic has caused small businesses a lot of different challenges. On the demand side, small businesses might face reduced revenues or shortages in liquidity (assets that can be easily converted into cash). Meanwhile, on the supply side, they might have a reduced labour force as employees continue to work from home; or disrupted supply chains that lead to shortages of goods.

What began with huge disruption, however, has transformed into record levels of trade in many regions, with full capacity ships and the rise of digital innovations that accelerated the industry's transformation. So how can small businesses find the benefits?

The challenges facing small businesses

As a small business, you might be facing cargo delays and problems with your supply chain's cash flow – especially at the crucial moment when your company is ready to take off. You might have already built a solid demand for your products, but now you are having issues with extended payment terms for these products, for instance, your eligibility for a bank loan.

To solve such problems, your company might need more working capital (the money you have left after accounting for everything going in and out) to increase production, build inventory levels or extend payment terms. Unfortunately, it is hard for small businesses to get the kind of bank loan that would provide this working capital, as you can’t provide the often-requested extra security by traditional banks. In these circumstances, it is best to focus on growing your business instead, increasing sales and your annual turnover – and that's where trade finance comes into play.

How trade finance can help you

International trade finance companies can help as catalysts to grow your business. They offer import and export financing solutions for both buyers and sellers and they can help small businesses import and export businesses, in the long run, to be profitable in a global economy.

For instance, if you are a seller, you want to be paid upfront for the goods you are shipping – whilst the buyers want to wait until they have sold those goods onto their customers. This means as a seller, you could be waiting 60 or 90 days before you get paid. The solution is a trade finance platform which pays you once you ship your goods – making export finance
fast and flexible.

At Twill, we provide you with the option to add financial services to your booking. With MODIFI, we have a reliable partner who is specialised in growing small businesses with digital trade finance.

"We see a lot of small and medium-sized businesses with the same problems - managing risk and working capital. Many businesses cope with payment terms that aren't favourable to them, especially when the other aspects of the trade are positive, but they don't know that there are solutions which give them the best of both worlds. Trade finance can help small and medium-sized businesses grow, whilst insuring them against unforeseen events, like defaults and delays."

Ankit Goel
Ankit Goel, Regional Head UAE at MODIFI

Webinar: Top tips for preparing to trade in 2021

To look into how you can manage your small and medium-sized business in 2021, we have teamed up with MODIFI. Together we present you "Top tips for preparing to trade in 2021". In our webinar you will learn how to trade more efficiency – and with insights from experts, we explain how technology can enable international growth for your business and how platforms can make trading globally easier.

You will get insights on:

  1. What's currently happening in the shipping industry

  2. How to manage risk and working capital in a changing landscape

  3. How technology is enabling transparency in international trade

Do you want to watch the highlights on demand? Then click here.

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