Exporters: It’s a fine line to walk

Cross-border trade raises one crucial question: Can you trust the buyer to pay their dues? You want to get paid before shipping your goods. But importers want to receive the goods first. Do you take the risk and export on open account terms? Or is it safer to kill the deal, missing out on a profitable business relationship?

Trade finance to the rescue?

If you can't afford to take a leap of faith, trade finance instruments offer a solution. A letter of credit could be the springboard that gets your relationship off the ground. Dealing with an established bank lowers your risks. You could also look to insure your export receivables. This way you have some security. But finding the right service is difficult for small and medium-sized exporters. Trade finance instruments are rarely tailored to their specific needs.

Prohibitively expensive

Banks prefer large clients. For a typical letter of credit you pay between 0.5 and 1.5% of a deal’s value. However, banks set minimum fixed fees. As a consequence, smaller transactions will quickly carry a price tag of 5%. Now consider this: Any small typo will force you to modify your letter of credit. Here you go again, paying even more. Security of payment comes at a great cost – your bottom line.

Tailor-made trade finance

Our mission is to provide affordable and easy-to-use trade finance instruments for SME exporters. New trading partners in foreign countries can use today’s blockchain technology to build trust and lower costs. We create tailor-made trade finance solutions to make today’s technology available to SME exporters.