Companies must make quick informed decisions to succeed in global trade and FMCG (fast-moving consumer goods).

Succeeding in international trade requires efficient processes for:

• Procurement
• Production
• Distribution
• Sales

But the above alone will not guarantee continued success and year-on-year growth. Other contributing factors are trading experience and financial security and flexibility.

Banks are Less Interested in SME Trade Finance

Strict government regulations (e.g. the Basel III Accord) have caused banks to be less flexible with international lending. 

Banks must adhere to compliance requirements which have resulted in them providing fewer short-term loans to small- and medium-sized enterprises (SMEs). According to Exportmanager*, banks have recently rejected approximately 50% of SME financing requests.

The decision-making process for loans can take time. This creates a collective opinion that many smaller, riskier loans are not worth the time and effort. 

Larger, established companies usually have a clean, positive credit history. SMEs (particularly those in emerging markets) often don’t. So banks tend to focus on larger loans for customers they see as less risky.  

SMEs - especially those engaged in global trade - need agile financing partners. One advantage that non-bank financiers have is greater flexibility.

Alternative Trade Financing Options

The Asian Development Bank (ADB) estimates that the loss of bank financing for SMEs has left a gap of around $1.5 trillion (USD). Many non-bank financiers offering supply chain finance are startups that intend to close that gap.

Solutions like invoice financing can provide much-needed liquidity to SMEs. 

Non-banks can provide invoice financing services faster thanks to fewer regulations and fast technology. SMEs also have minimal paperwork to complete when using online financiers.

Stenn - Driving Innovation in Trade Finance

Stenn has established itself as a category leader in this challenging financial environment. Stenn is the fastest-growing online platform for SMEs to access fast liquid cash. Applying for invoice finance with Stenn is easy because customers need two signed documents and no collateral. Funds can arrive within 48 hours of approval.

Stenn has financed $8 billion (USD) in invoices across 74 countries to date.

Stenn’s founder and CEO - Greg Karpovsky - has over 20 years of international trade finance experience and leads a team of similar-minded experts. Major European banks have partnered with Stenn to provide a global financing solution. 

In conclusion, these partnerships produce three winners: 

• The international Suppliers and Buyers who gain agility and liquidity.
• Our corporate investors who benefit from global financing. 
• Stenn, the innovative startup listed in the 2022 Financial Times’ list of 1000 Europe’s Fastest Growing Companies.

* See interview with Henry Balani in Exportmanager, 3/2018

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