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61% of small business owners regularly struggle with cash flow issues, according to the 2019 QuickBooks State of Small Business Cash Flow survey. As a result of those cash flow issues, 32% of small business owners are unable to pay vendors, loans, themselves, or employees.
SMEs are usually hit by cash flow problems somewhere in between the time that they export goods and when they receive payment once the importer has sold them. Trade finance provides a solution to help SMEs bridge this gap and thereby eliminate cashflow issues within the supply chain. When cash is in short supply, it can impact business in multiple ways such as:
Late payments to suppliers, leading to strained relationships
Late debt repayments, leading to decreased credit ratings
Missed opportunities to grow the business
Reduced employee morale and unpaid wages
Reduced customer satisfaction
Business closures due to insolvency
One of the most adverse challenges for SMEs is securing funding. Despite their contribution to the global trade landscape, SMEs still tend to have difficulty fulfilling day-to-day cash flow responsibilities. Here are some of the ways trade finance can help SMEs grow:
1. Alternative Finance
Trade finance solutions provide SMEs with financial assistance that they cannot find from their traditional banks. Alternative finance providers do not require collateral, but rather they rely on the credit strength of the company and consider their bottom line and balance sheet. The profitability of an SME will serve as the foundation for security. If your business ticks all of these boxes you may be able to join the TradeRiver journey to growth:
Annual Turnover over £2m
Net Worth over £200k
Trading for 2 years +
Creditworthy
Limited companies or LLP's
2. Growth
Trade finance is flexible. The solution can adapt to all SME needs including cross border exports. Trade finance typically includes a variety of currencies. At TradeRiver, our multi-currency capabilities make the payment process simple. Facilities from £100,000 to £5,000,000 or more, with payments being made in the currency of your suppliers’ choice. With the help of a good business model and the right selling opportunity, the challenge often comes down to getting funds back from the importer. Fortunately, alternative funding can solve this matter with a trade finance solution.
3. Combat Constraints
The UK is one of the largest importers of goods from both Europe and the East. One of the challenges that SMEs face is the amount of time it takes to get stock imported or exported -- not to mention the price involved through shipping time which can be excessively costly. With trade finance solutions, alternative finance providers assume the role of the 'middle man' and work to offset these issues by giving both buyers and sellers an opportunity to be more profitable. Trade finance solutions can provide funding against receivables, invoices, and other outstanding costs before shipping or selling.
4. Simple and Reliable
At TradeRiver, we offer a cross border solution to keep your supply chain moving and your business growing. A facility that provides you with an unsecured revolving credit line to fund purchases of goods or services both in the UK and worldwide. TradeRiver provides SMEs with trade finance solutions; therefore, taking SME import and export businesses to the next level, being profitable in a global economy. Trade finance for SMEs helps to develop business growth and that of the UK economy as a whole.
Contact Us for more information.