Bridging The Trade Finance Gap

No Collateral Needed Besides the Goods Being Traded*

Empowering SMEs for Sustainable Global Trade

Financely offers tailored solutions to help SMEs access the capital and tools needed to navigate the trade finance ecosystem:

  • Issuance of Commercial Paper Backed by Trade Receivables
    Financely enables SMEs to issue short- and medium-term commercial paper backed by their trade receivables. This innovative financing mechanism allows businesses to convert outstanding invoices into liquid capital, addressing immediate cash flow needs. By leveraging these receivables, SMEs secure funding without diluting ownership or requiring additional collateral.
  • Facilitating Access to Revolving Credit Facilities
    Financely connects SMEs with regional banks willing to extend revolving credit facilities tailored to their specific trade cycles. These credit lines provide flexibility for businesses to manage import and export operations efficiently while keeping financing costs predictable.
  • Risk Mitigation through Structuring
    Financely employs robust risk-mitigation strategies, including:
  • Due Diligence: Comprehensive credit assessments of trading counterparties to minimize default risks.
  • Insurance Products: Collaborations with insurers to provide coverage against political and commercial risks.
  • Supply Chain Transparency: Utilizing digital tools to ensure traceability and compliance in trade transactions, building trust among financiers and buyers alike.
  • Digital Trade Finance Solutions
    By harnessing technology, Financely reduces transaction costs and expedites financing approvals. Digital platforms streamline processes such as anti-money laundering (AML) compliance and know-your-customer (KYC) verifications, making financing accessible even in underserved markets.

Closing The Trade Finance Will Accelerate Global Economic Development

The global trade finance shortfall reached $2.5 trillion in 2022, up from $1.7 trillion in 2020, representing 10% of global merchandise trade​​. This gap severely hampers international trade, especially for small and medium-sized enterprises (SMEs) in developing economies. With trade contributing 80% of global GDP, addressing this issue is essential to foster economic resilience, ensure equitable growth, and meet global development goals.



The Mechanics of the Trade Finance Gap

Trade finance ensures liquidity and mitigates payment risks for exporters and importers. However, SMEs—critical drivers of employment and innovation—often struggle to access these resources due to systemic barriers:

  • High Rejection Rates: SMEs represent 40% of trade finance rejections despite accounting for less than a quarter of applications. Common reasons include insufficient collateral, lack of transaction history, and higher perceived risks​​.
  • Elevated Costs: SMEs in developing regions pay exorbitant premiums, with interest rates 4-10% above benchmarks. For smaller enterprises, this renders trade finance prohibitively expensive​.
  • Uneven Distribution: In advanced economies, 60-80% of trade is supported by trade finance. In contrast, regions like West Africa and the Mekong see coverage below 25%, leaving many viable transactions unmet​.


Economic Costs of Inaction

The absence of adequate trade finance stifles economic growth and perpetuates inequality. For instance, increasing trade-finance coverage in Cambodia and Vietnam by 20 percentage points could raise exports by 8-9% and imports by 5-6%, generating $55 billion in annual trade for Vietnam alone​. Furthermore, inclusive trade finance facilitates access to critical goods like food and medicine, directly impacting societal well-being.

Technical Innovations to Close the Gap

Financely is committed to creating a more equitable global trade system. Trade finance isn’t merely a financial tool—it is the foundation of economic stability, growth, and inclusion.

Leveraging Commercial Paper Markets

The issuance of commercial paper backed by trade receivables is a game-changer for SMEs. This approach diversifies funding sources by attracting institutional investors to trade finance, reducing reliance on traditional banking. It also lowers costs by converting short-term trade obligations into tradable instruments, improving liquidity for businesses while mitigating risk for lenders.


Expanding Revolving Credit Access

Regional banks, with their local expertise, are pivotal in addressing the trade finance gap. Financely fosters partnerships between SMEs and these institutions, facilitating credit arrangements that are scalable, sustainable, and regionally relevant. This model promotes a decentralized approach to trade finance, ensuring that businesses in emerging markets are not left behind.


Economic and Social Impact

Expanding trade finance access yields transformative outcomes:

  • Trade Volume Growth: Increased financing coverage could drive merchandise trade worth billions annually, especially in high-impact sectors like textiles, electronics, and processed goods​.
  • Job Creation: Greater access to financing allows SMEs to expand operations, creating employment opportunities in underserved regions.
  • Supply Chain Resilience: Enhanced liquidity strengthens global supply chains, ensuring timely delivery of goods, especially during crises.


The Role of Policymakers and Industry Stakeholders

Financely collaborates with policymakers, multilateral institutions, and private financiers to implement systemic reforms. Key priorities include:

  • Digitalization: Adopting harmonized standards for electronic trade documents to streamline global trade operations.
  • Capacity Building: Training SMEs and local banks on trade finance instruments and risk management.
  • Policy Advocacy: Encouraging governments to support SME trade finance through guarantees, subsidies, and regulatory reforms.

01 Analysis

The process initiates with an in-depth analysis of the client's financial needs and transaction details. Key documents, such as Information Memorandums, are reviewed to understand the trade specifics, including the commodities and markets involved. This step involves a thorough risk assessment, credit analysis, and market research to establish a detailed financial profile of the client.


Here is a conditions precedent checklist for successfully structuring trade finance transactions.

02 Structuring

In the structuring phase, a detailed financial model is developed. This includes selecting appropriate financial instruments (like syndicated loans or revolving credit facilities) and defining their terms. Critical at this stage is the involvement of credit rating agencies, which assess the creditworthiness of the transaction, influencing the terms and cost of finance. The structure aims to balance risk, cost-effectiveness, and regulatory compliance.

03 Documents

Here, essential documents like term sheets, loan agreements, and risk mitigation instruments are prepared. The documentation phase also involves creating or reviewing existing Information Memorandums that provide comprehensive details about the transaction for potential financiers. 

04 Syndication

The syndication step involves presenting the structured deal to potential financiers, which can include investment banks, commercial banks, and institutional investors. The goal is to secure commitments for funding. This phase is crucial for determining the final terms of financing, influenced by the lenders' risk appetite and market conditions.

05 Legal Review

Once financiers have committed, a thorough legal review of all transaction documents is conducted. This ensures that the agreements are legally sound and enforceable. This step also involves finalizing any collateral arrangements and ensuring all regulatory requirements are met.

06 Disbursement

The final step is the disbursement of funds, where the financial resources are released as per the agreed structure. This step marks the culmination of the trade finance distribution process, enabling the client to execute their trade plans with the assured backing of the necessary capital. 

All The Trade Finance Services You Require. In One Place.

We have what it takes to help your business prosper. To find out more about trade finance distribution click the highlighted text to, download our brochure.

Request A Quote

Trade Finance Partners

Share by: