Today, small to mid-sized enterprises (SMEs) are presented with a menu of options to choose from when seeking trade finance options. In the wake of open account trade financing, the rise of pre-export financing has become increasingly prevalent among companies seeking alternative cash injection options.
Accounts payable financing is a solution for companies seeking to extend the terms on their supplier invoices. Notably, accounts payable financing is otherwise referred to as vendor financing or trade credit. This flexible financing solution helps companies by providing additional working capital without racking up more debt and encumbering company assets.
Trade finance is a centuries old industry that remains true to its traditional business model. Traditional it is, but the industry has seen little to no change or adaptation over the past decade despite the digital disruption present in all business sectors. Whether the business of trade addresses the shifting landscape or not, the trade finance industry is increasingly faced with both opportunities and threats.