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March 18, 2024
Trade Finance & Cybersecurity: What you need to know

In today’s digitally interconnected world, technology and digital platforms play a critical role in global trade finance efficiency. While these advancements improve speed and accessibility, they also expose trade finance systems to cybersecurity risks. As stakeholders manage the complexity of international trade, it is crucial to identify significant cybersecurity risks and implement effective mitigation techniques to safeguard against potential threats.

1. Phishing attacks

The ongoing concern regarding phishing attacks remains a significant challenge within the realm of trade finance. Cybercriminals employ deceptive tactics, such as fraudulent emails or counterfeit websites, to illicitly obtain sensitive data like login credentials and financial information. These activities not only undermine the integrity of trade finance transactions but also expose organisations to substantial financial and reputational risks.

To limit their vulnerability to phishing attacks, businesses should prioritise investing in strong email security solutions such as spam filters, email authentication protocols, and anti-phishing software. Furthermore, regular training sessions to raise employees’ understanding of phishing strategies are critical for equipping them to detect and report suspicious emails. Integrating multi-factor authentication (MFA) improves security by necessitating additional verification stages, reducing the likelihood of unauthorised access due to compromised credentials.

2. Data breaches

The protection of confidential data from breaches is a top priority for trade finance operations. Breaches compromise the security and confidentiality of trade finance data, which includes transactional details and sensitive customer information, potentially leading to financial fraud, identity theft, and regulatory non-compliance issues. As a result, trust in trade finance activities is weakened.

To minimise the risk of data breaches, companies should utilise encryption methods to protect sensitive trade finance data both while at rest and during transmission. This measure serves to prevent unauthorised access to the information. Furthermore, setting up access controls and user authentication procedures in accordance with the principle of least privilege guarantees that only authorised individuals can gain access to sensitive data. For identifying and addressing security vulnerabilities within trade finance systems and networks, conducting routine security assessments, penetration testing, and employing Intrusion Detection and Prevention Systems (IDPS) are essential measures.

3. Ransomware attacks

Ransomware attacks pose a severe threat to trade finance operations by encrypting critical data and demanding ransom payments for decryption keys. These attacks can disrupt business operations, cause financial losses, and damage the reputation of organisations involved in trade finance.

To reduce the possibility of ransomware attacks, organisations must frequently update backups of critical trade finance data and systems to facilitate recovery in the case of an attack. Using endpoint security solutions with behaviour-based detection and ransomware mitigation features is critical for detecting and preventing ransomware threats before they cause damage. Furthermore, conducting employee education and awareness efforts is critical for teaching employees about the risks connected with downloading suspicious files or clicking on harmful links, which reduces the likelihood of ransomware infections.

4. Supply chain risks

Supply chain risks present a unique challenge to trade finance operations, as organisations rely on third-party vendors, service providers, and trading partners to facilitate transactions and support business processes. However, vulnerabilities within the supply chain can expose trade finance operations to cyber threats such as supply chain attacks, data breaches, and malware infections.

To mitigate supply chain risks, organisations must perform due diligence and risk assessments of third-party vendors to evaluate their cybersecurity posture and adherence to security best practices. Establishing contractual agreements that include cybersecurity requirements, data protection clauses, and incident response protocols is crucial for ensuring accountability and mitigating potential risks. Continuous monitoring and auditing of third-party access to trade finance systems and data help detect and mitigate security incidents promptly.

5. Insider threats

Insider threats represent inherent dangers that make it difficult to maintain data security within trade finance operations. Privileged personnel may purposefully or unintentionally violate data security, resulting in data breaches or fraudulent acts that jeopardise the integrity of trade finance transactions.

To address the risks associated with insider threats, organisations must adopt strict role-based access controls and robust user monitoring techniques to detect unusual behaviour as soon as possible. Regular employee background checks and strict security standards for the management of sensitive information are critical strategies for mitigating insider dangers. Furthermore, using user activity monitoring and behaviour analytics technologies can assist in identifying deviations from regular behaviour patterns, allowing organisations to respond quickly to any insider threats.

In conclusion, protecting trade finance operations from cybersecurity risks necessitates a proactive and multifaceted approach that includes technical controls, personnel education, risk management techniques, and incident response readiness.

At Incomlend, we strive to remain at the forefront of cybersecurity by implementing all available safeguards against cyber assaults on ourselves and our clients. Your digital safety is our top priority!

 

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February 22, 2024
Incomlend Group Acquires Web 3 Fintech, LC Lite

Incomlend Group, a global invoice finance marketplace for SMEs, recently revealed its strategic acquisition of LC Lite, a specialised trade finance marketplace, integrating Web3 technology into its platform. This strategic initiative is focused on leading the way in creating a new asset category that merges the reliability of receivables financing with the growth opportunities found in digital asset values.

Thanks to the acquisition, LC Lite will enable the company to utilise a new fintech platform, broadening its audience to both crypto and fiat investors in trade finance and speeding up its expansion in the Middle East. It also guarantees that investors have simultaneous access to both the LC Lite and Incomlend platforms, each with its own separate fintech solutions.

Expanding Incomlend’s platform services will now allow transactions to be conducted in any currency to finance an exporter. Discussing the recent collaboration, Morgan Terigi, co-founder and CEO at Incomlend, expressed excitement over the acquisition of the fintech LC Lite.

‘’This allows us to connect the crypto and fiat spaces, which will be essential as both markets grow and new technologies emerge. This merger will also enhance the marketplace’s liquidity, ultimately contributing to the growth of the UAE economy.’’

Jean-Charles Devin, Co-founder and Director at LC Lite, also mentioned that by partnering with Incomlend, LC Lite can enhance its business model and increase the value of its digital assets on the platform, leveraging its successful two-year track record.

“Furthermore, with the LC Lite technology, Incomlend will be able to venture into the web3 digital world” Devin concluded.

The merger with LC Lite allows Incomlend to expand their fintech services to a broader audience of investors, helping them provide their services to a larger group of investors and further their goal of enhancing financial inclusion in Singapore.

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15/01/2024
Trade Finance Trends to Watch in 2024

Trade finance is an important part of international trade because it provides businesses with the financial backing they need to conduct cross-border transactions. Trade finance trends evolve alongside the global economy. In this article, we’ll look at the top trade finance trends to watch in 2024 and how they will affect businesses and the trade industry as a whole.

The Growth of Export Finance

Export finance, often known as export credit, is a type of trade finance that offers financial assistance to enterprises that export goods or services. This sort of funding has grown in popularity in recent years and is projected to expand further in the future.

One of the primary reasons for the development in export finance is the growing demand for goods and services from emerging economies. As these markets expand, businesses seek new ways to fund their export efforts and capitalize on the opportunities they bring.

Furthermore, export funding is becoming increasingly available to small and medium-sized businesses (SMEs). This enables smaller enterprises to compete in the global market and broaden their scope.

Digitalization of Trade Finance

The trade finance business has traditionally been paper-based, with a strong emphasis on physical papers and manual operations. However, with the advancement of technology, the industry is undergoing a digital transition.

Digital trade finance is the use of technology to streamline and automate trade financing procedures. This involves the use of electronic documents, online platforms, or blockchain technology.

The digitization of trade finance provides various advantages, including enhanced efficiency, competitive pricing, and improved security. It also facilitates coordination among various stakeholders involved in a trade transaction, including lenders, exporters, and importers.

The Rising Importance of Trade Credit

Trade credit, sometimes known as supplier credit, is a sort of short-term financing that enables firms to purchase goods or services on credit from their vendors. This sort of funding has grown in popularity in recent years and is projected to expand further in the future.

One of the primary reasons for trade credit’s growing importance is purchasers’ increased need for flexible payment arrangements. As firms seek strategies to manage their cash flow and decrease financial risk, trade credit provides a feasible option.

Furthermore, as digital platforms that connect buyers and suppliers grow in popularity, trade finance is becoming more accessible to businesses of all sizes. These systems enable enterprises to easily negotiate and monitor trade credit arrangements, making them a more appealing option for financing trade transactions.

The Effect of Geopolitical Events on Trade Finance

Geopolitical events, such as trade wars and political instability, have a considerable impact on the global economy and, by extension, trade finance. In recent years, we have seen how these occurrences can disrupt supply chains and generate uncertainty for enterprises involved in international trade.

In 2024, geopolitical events will continue to have an impact on trade finance. As countries continue to negotiate trade tensions and political upheavals, businesses must be prepared for unexpected disruptions and have backup plans in place.

This could lead to an increase in demand for trade finance products like trade credit insurance, which can help alleviate the financial risks associated with such situations.

The Development of Alternative Financing Options

Traditional trade finance products, such as letters of credit and documentary collections, have long been popular among international trade enterprises. However, in recent years, we have seen the growth of alternative financing solutions that provide greater flexibility and better conditions to firms.

One of the most important alternative financing possibilities is supply chain finance, which enables businesses to obtain funding based on their supply chain partnerships. This sort of financing is especially useful for SMEs since it allows them to use the creditworthiness of their larger customers to obtain finance at reduced rates.

The importance of sustainability in trade finance

Sustainability has become a priority for both organisations and consumers, and this trend is projected to continue in the future years. As a result, we may expect to see sustainability becoming more important in trade financing.

One way this could materialise is through the use of sustainable trade finance products like green trade finance and sustainable supply chain financing. These products offer finance to firms that engage in sustainable activities such as renewable energy projects or sustainable supply chain operations.

Furthermore, we may witness a rise in demand for sustainable due diligence in trade financing transactions. This might include requiring enterprises to demonstrate their sustainability practices and policies before being accepted for financing.

Importance of Risk Management in Trade Finance

As the global economy grows increasingly integrated, the dangers associated with international trade increase. This makes risk management an essential component of trade finance, and we should expect to see a growing emphasis on it in the coming years.

One way this could materialise is the use of technology to identify and manage risks in trade finance transactions. This could entail applying artificial intelligence and machine learning to data analysis and risk identification.

Furthermore, we may see an increase in the usage of trade credit insurance, which can assist reduce the financial risks connected with international trade. This sort of insurance covers non-payment by purchasers, political hazards, and other trade-related risks.

Conclusion

The trade finance market is continuously evolving, and organisations must stay up to date on the latest developments to remain competitive. In 2024, we may anticipate an increase in export finance, digitization of trade finance, and the growing relevance of trade credit.

Geopolitical events will continue to affect trade financing, and businesses must be prepared for unexpected interruptions. In the future years, the trade finance environment will be shaped by the rise of alternative financing sources, as well as an increased focus on sustainability and risk management.

Businesses that remain aware and react to these trends can position themselves for success in the ever-changing world of trade finance.

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December 12, 2023
Global Trade Finance in 2023: A Year in Review

As we say goodbye to 2023, it’s time to look on the significant features and trends that defined the global trade finance landscape. Geopolitical movements, technical improvements, and changing economic landscapes have all contributed to substantial changes in the realm of international trade. In this article, we’ll look at the important events that shaped global trade finance in 2023.

1. Digital Transformation Becomes the Centre of Attention

The rapid adoption of digital technologies in trade finance was one of the most visible trends in 2023. Blockchain, artificial intelligence, and other cutting-edge technologies were crucial in speeding procedures, eliminating paperwork, and increasing transparency. The usage of smart contracts on blockchain systems has grown in popularity, allowing for secure and quick transactions while reducing the danger of fraud.

2. Green Finance and Long-Term Trade

The year 2023 marks a watershed moment in the trade finance sector, with sustainability taking front stage. Green finance initiatives gained traction, with more corporations implementing environmental, social, and governance (ESG) principles into their trade financing processes. Financial institutions became increasingly willing to sponsor environmentally friendly initiatives, and sustainable trade finance products gained traction, harmonising with global efforts to mitigate climate change.

3. Resilience in the Face of Global Supply Chain Disruptions

In 2023, global trade faced unprecedented hurdles, with supply chain interruptions caused by a variety of circumstances including the ongoing pandemic, geopolitical tensions, and natural calamities. Trade finance has become an essential instrument for businesses looking to remain resilient in the face of these upheavals. Supply chain financing and trade credit insurance were critical in assisting businesses in navigating uncertainty and assuring a consistent flow of products and services despite the hurdles.

4. Geopolitical Shifts and Trade Policy Modifications

Changes in alliances, trade agreements, and policy changes impacted the movement of commodities and services as geopolitical forces continued to influence global trade patterns. Trade disputes between major economies have changed trade finance tactics, leading corporations to re-evaluate risk management procedures and explore alternate markets. Professionals in trade finance have found themselves adapting to a shifting geopolitical context, looking for new opportunities while managing associated risks.

5. Digitalization of trade and cross-border payments

The digital revolution in trade finance went beyond the implementation of cutting-edge technologies. With the widespread use of digital currencies and central bank digital currencies (CBDCs), cross-border payments have undergone a shift. The goal of this change was to streamline payment processes, lower transaction costs, and increase the speed of cross-border transactions. Integration of digital payment platforms into trade finance ecosystems has become more frequent, resulting in increased efficiency and transparency.

6. Regulatory Advances and Compliance Challenges

To keep up with the digitization of the trade finance sector, regulatory frameworks had to develop. Global regulatory organisations implemented measures to handle the difficulties and opportunities posed by technological breakthroughs. Compliance with international trade regulations got more complex, necessitating investments in advanced risk management systems to successfully navigate the regulatory landscape.

7. The Evolution of Trade Finance Platforms

Trade finance platforms like Incomlend grew in popularity in 2023 as businesses sought integrated financing solutions. These platforms provided end-to-end visibility by bringing together diverse parties in the trade finance ecosystem, such as buyers, sellers, financial institutions, and logistical providers. These systems use data analytics and artificial intelligence to improve cooperation, expedite operations, and deliver real-time insights into trade activities.

Reflecting on the important highlights of global trade finance in 2023, it is clear that the sector has undergone significant transformation. The digitalization of processes, the emphasis on sustainability, and the resilience shown in the face of supply chain disruptions have transformed how organisations handle international commerce. In the future, the ongoing growth of technology, the emphasis on sustainable practices, and the ability to handle geopolitical difficulties will all be significant aspects defining the future of global trade finance. To prosper in the ever-changing world of international trade, businesses and financial institutions must stay nimble, adaptive, and forward-thinking as we enter a new century.

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November 20, 2023
How Blockchain Can Revolutionise International Trade Finance and Supply Chains

Supply networks and financial dealings must be efficient and open to all parties involved in the complicated web of international trade. Traditional trade finance systems, packed with complexities and inefficiencies, have long been a roadblock in the seamless flow of products around the globe. Blockchain technology, a distributed and transparent ledger system, is entering the scene and radically altering the world of trade finance and global supply chains.

Challenges in Trade Financing and Supply Chain Management

International trade would not be possible without trade finance, which includes a wide range of monetary tools and procedures designed to ease cross-border transactions. The traditional trade finance system is built on paper-based documentation, such as letters of credit and bills of lading, which causes delays, inaccuracies, and a lack of transparency. Important links in the global supply chain, import and export procedures nevertheless confront hurdles including the inefficiency of paper-based processes and the possibility of fraud and inaccuracies.

Information asymmetries and inefficiencies are common in the global supply chain, a complex network involving various stakeholders from manufacturers to distributors to retailers. The lack of real-time insight into the movement of commodities can result in delays, greater expenses, and a higher likelihood of errors. These obstacles not only slow down trade but also put enterprises at serious danger financially.

The Blockchain Revolution

A decentralised and distributed ledger that records transactions over a network of computers is at the heart of the blockchain revolution. Although initially recognised for its role in the creation of virtual currencies like Bitcoin, the blockchain technology behind them has shown to have far-reaching ramifications outside the domain of digital currencies. Blockchain’s decentralised nature, transparency, and immutability make it a potential game-changer in international trade finance and supply chain management.

Blockchain’s distributed ledger structure removes the middleman from financial dealings. In the context of international trade finance, this means that parties to a transaction can communicate with one another in a fully automated way by using smart contracts. Since the parameters of the contract are public and cannot be changed, the time spent on transactions is cut down significantly, and the likelihood of fraud and disputes is reduced.

But what is a smart contract?

A smart contract is like an online deal that lives on a computer. It’s a computer programme that, when certain conditions are met, will automatically carry out, enforce, or check the terms of a contract. Think of it as a contract that follows its own rules, which are written in code.

If you have a smart contract, the terms of your deal are written in a language used for writing computers and saved on the blockchain, which is like a safe and open digital record. This makes sure that the contract can’t be changed and can be seen by everyone concerned.

Also, it’s fully decentralised and reliable: this means that the deal doesn’t need to be watched over by a third party, like a bank or a lawyer. The code itself makes sure that the agreement is followed, which makes the whole process more reliable.

An easy way to think about a smart contract is as a computer programme that does what it is told to do. When the agreed-upon conditions are met, it acts on its own. This makes agreements more safe, clear, and automatic.

Another area where blockchain can help is indeed trade finance and supply chain. The blockchain records all transactions in a distributed ledger that is accessible to all parties involved in the transaction in real time. With this level of visibility, all parties involved in the supply chain can follow packages as they travel from manufacturer to retailer. This not only decreases the danger of fraud but also enables speedier identification and resolution of issues such as delays or anomalies.

Because of blockchain’s immutability, once a transaction has been recorded, it cannot be changed or removed, adding another layer of security to the system’s decentralisation and transparency. The immutability of the blockchain means that all parties involved in a trade finance transaction can have faith in the data being presented to them.

Trade finance and supply chain management have the potential to become more efficient and transparent if blockchain is adopted. LC Lite, our sibling firm, is a blockchain-enabled platform that digitises global trade receivables finance using a unique token-powered transaction mechanism. For further information, sisit LC Lite website for more info.

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October 15, 2023
Glossary of Trade Finance: Terms and Definitions

Trade finance is a complicated and multidimensional topic with specialised language that can be intimidating to newbies. In this blog post, we’ll demystify trade finance by giving a dictionary of key terminology and meanings, allowing you to more efficiently navigate the complex world of global commerce and finance.

Letter of Credit (LC): A financial instrument issued by a bank on behalf of a buyer (importer) to pay a seller (exporter) a particular sum if certain criteria are met. In international transactions, LCs provide security and trustOpen Account: A transaction in which products are transported and delivered before payment is received. The exporter believes the importer will pay at the agreed-upon future date.

Export Credit Insurance: A policy that protects exporters from non-payment by international purchasers. It guarantees that the exporter will be compensated even if the buyer fails to pay.

Importer of Record (IOR): The person or entity in charge of ensuring that imported products comply with all applicable rules and regulations. They are also obligated to pay import charges and taxes.

Bill of Lading (B/L): A legal document issued by a carrier (often a shipping business) to confirm the receipt of goods for transportation. It functions as both a receipt and a carriage contract.

Bank Guarantee: A guarantee given by a bank on behalf of a customer to assure that a contract will be fulfilled. It serves as a financial safeguard.

Risk Mitigation: The practise of reducing exposure to financial or operational risk in international trade, which is frequently accomplished through insurance, hedging, and other measures.

Forfaiting: A trade financing practise in which a forfeiter (often a bank or financial institution) purchases an exporter’s receivables at a discount, resulting in rapid cash flow.

Documentary Collection: A technique of trade payment in which a bank works as an intermediary to enable payment between an exporter and an importer based on the presentation of specific papers.

Incoterms: A collection of internationally recognised trade terminology that specify the responsibilities of buyers and sellers in international trade, such as FOB, CIF, and EXW.

Trade Finance Facility: A financial institution’s credit or financing arrangement to assist a company’s international trade activities, such as working capital loans and LCs.

Sight Draft: An instant payment demand, usually related with documentary collections. The importer must pay when the draught and related paperwork are presented.

Cross-Currency Swap: A financial arrangement in which participants swap one currency for another at a predetermined exchange rate and then reverse the transaction at a later date.

Eximbank: A government agency or financial organisation that provides trade financing solutions and export credit insurance to help a country’s exports and economic growth.

Due Diligence: The process of analysing and evaluating potential trade partners’ financial and legal backgrounds to ensure they are reliable and trustworthy.

Demurrage: Charges incurred when cargo is not unloaded from a vessel within the agreed-upon time frame, which is frequently due to delays or inefficiencies.

Force Majeure: A phrase in a commercial contract that exempts parties from contractual duties due to unanticipated occurrences such as natural disasters or political unrest.

Commercial Invoice: A document delivered by the seller to the buyer that details the products sold, their prices, and other transaction details.

Consolidation: The process of consolidating numerous smaller shipments into one larger package in order to save money on shipping.

Hedging: A financial strategy that helps to limit risk in international trade by protecting against unfavourable currency exchange rate swings.

ICC Rules: A set of standardised rules and guidelines established by the ICC to manage international trade practises, including the Uniform Customs and Practise for Documentary Credits (UCP 600).

When you understand the fundamental concepts, navigating the world of trade finance becomes less intimidating. This dictionary is an invaluable resource for anyone active in international trade or interested in learning more about the complex world of trade finance. Understanding these words will allow you to make more educated judgements, negotiate contracts, and manage the financial side of global trade more successfully.

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September 14, 2023
The Four Pillars of Trade Finance: Payment, Risk Mitigation, Financing, and Information.

The flow of products and services across international borders is facilitated by trade financing. For international business to run smoothly and with minimal disruption, four fundamental pillars must be in place. Payment, risk management, financing, and data are the four mainstays. An effective and reliable trade financing system rests on four distinct but interrelated pillars.

1. Payment

Payment is the fundamental part of any business transaction and describes the process by which purchasers pay providers of products and services in international trade. For there to be mutual confidence between traders, the payment system must be safe, quick, and open.

Letters of Credit (LC) are widely utilised in international trade as a means of payment. A LC is a bank guarantee that the seller will be paid once the terms and conditions of the agreement have been met. As the bank of the buyer guarantees the payment upon presentation of the necessary paperwork, this creates a level of confidence between the buyer and the seller. This system reduces the seller’s exposure to non-payment, a critical issue in cross-border transactions.

2. Protecting Financial Deals from Danger

Risk mitigation is the second pillar of trade finance, and it’s crucial for shielding both buyers and sellers from the many dangers inherent in cross-border transactions. Political unpredictability, economic volatility, swings in exchange rates, and other factors all pose potential dangers. Trade ties can only survive if these dangers are reduced as much as possible.

Trade credit insurance is a frequent method for reducing exposure to risk. This insurance shields exporters from financial loss should international buyers default on payments for goods or services they have purchased. It’s a cushion that helps exporters get into new markets with less concern about getting stiffed on payment.

Forward contracts and currency hedging are two more methods for reducing exposure to fluctuating exchange rates. Businesses can reduce the risk associated with currency changes by using these financial products to lock in favourable exchange rates.

3. Money: The Oil That Keeps Business Turning

The third pillar of trade finance is financing, which provides companies with the money they need to compete successfully on the global stage. Manufacturing, shipping, and warehousing are just some of the up-front expenditures that may add up quickly in a trade transaction. Without affordable finance options and enough cash flow, many companies would be unable to compete in international markets.

Trade credit is an important component of trade finance. Providing buyers with trade credit entails allowing them to delay payment for a certain amount of time. Sellers have an advantage in the market while purchasers are better able to control their cash flow thanks to this arrangement. Financial institutions that specialise in trade finance often provide trade credit by meeting the unique financing requirements of international trading companies.

In addition, supply chain finance has become increasingly common. By capitalising on the buyer’s high creditworthiness, it allows suppliers to gain access to early payment for their bills at a reduced cost. By increasing liquidity for both buyers and sellers, this scenario enhances the entire supply chain.

4. Knowledge is power. Information is power

The fourth and maybe most important aspect of trade finance is information. In today’s digital era, it’s more important than ever to have instantaneous access to reliable data in order to make educated choices about international business transactions. Data on possible partners, trade restrictions, and market intelligence are all examples of information.

Trends, demand patterns, and competitor actions can all be better understood with the help of market intelligence. With this knowledge, companies will be better prepared to respond to the ever-changing conditions of the global economy.

It is equally important to be familiar with the rules and norms governing international trade. Companies risk hefty penalties and loss of credibility if they are found to be in violation of international trade laws and regulations. As a result, knowing the rules governing international trade is crucial.

Conclusion

The four pillars of trade finance – payment, risk mitigation, financing, and information – collaborate in the complex web of international trade to enable the orderly exchange of goods and services. Trust is cultivated through the use of payment channels like Letters of Credit, and risks are mitigated through the use of risk mitigation products like trade credit insurance. Capital is made available through financing options like factoring, and information helps firms make educated choices.

These cornerstones continue to develop and change to fulfil the requirements of international trade in a dynamic global economy. Trade finance, supported by its four cornerstones, will continue to play a vital role in facilitating global commerce even as technology and markets evolve.

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August 15, 2023
The Transformation of Commercial Lending: How Technology Has Revolutionized Processes and Enhanced User Experience

In recent years, the commercial lending industry has undergone a profound transformation with the rapid integration of technology. As businesses continue to evolve and expand, so too have the demands for quick, efficient, and user-friendly lending processes. Technology has played a crucial role in meeting these demands, revolutionizing the way commercial lending is conducted. In this article, we will explore the impact of technology on commercial lending, focusing on how it has improved processes and user experience.

1. Streamlining Financing Applications

Traditionally, applying for a commercial loan involved arduous paperwork and prolonged processing times. However, with the advent of online platforms and digitized documentation, borrowers can now submit applications with ease and speed. Technology enables lenders to capture, organize, and analyze vast amounts of data, facilitating a more informed and accurate decision-making process. Advanced algorithms assess risk profiles, creditworthiness, and potential profitability, leading to faster loan approvals and increased efficiency. With Incomlend, for example, you can open a free account in few minutes.

2. Enhanced Data Analytics and Risk Assessment

Data analytics in commercial lending has been transformed by the use of technology. Big data can now be used by financial organisations to acquire extensive insights into borrower behaviour and market trends. Lenders can make better educated lending decisions by analysing past performance, cash flow estimates, and industry-specific parameters. This reduces risks and ensures loan sustainability. Real-time loan performance monitoring also enables lenders to take proactive efforts to address possible concerns as soon as they arise.

3. Automation of Routine Tasks

Many regular procedures that were once time-consuming and error-prone have been automated by technology. Back-office activities like as data entry, document verification, and compliance checks have considerably improved since the introduction of robotic process automation (RPA) and artificial intelligence (AI). Human resources are freed up to focus on more crucial areas of the loan process when these jobs are transferred to machines, enabling increased efficiency and accuracy.

4. Personalized Customer Experience

Lenders may now give a more personalised customer experience thanks to the inclusion of technology. CRM systems allow lenders to track interactions, preferences, and pain spots, allowing them to customise loan products and services to particular client needs. Furthermore, modern contact methods such as live chat and email support provide borrowers with rapid and accessible access to help, increasing overall satisfaction. Now is the time to try our live chat!

5. Improved Accessibility and Transparency

Technological advancements have made commercial lending more accessible to a broader audience. Online lending platforms and peer-to-peer lending have democratised access to financing, allowing SMEs to seek money outside of established banking channels. Furthermore, technology has increased transparency in the lending process by allowing borrowers to track the status of their loan applications in real time and receive extensive information on loan terms and conditions.

6. Efficient Credit Limits Assessment

Credit assessment, a critical aspect of the lending process, has seen significant improvements through the use of technology. Automated credit scoring models assess borrower creditworthiness with greater accuracy, considering various factors beyond traditional credit scores. By leveraging machine learning algorithms and technology, lenders can better predict default risks and tailor loan terms accordingly, striking a balance between profitability and risk management.

Conclusion

The integration of technology in commercial lending has undoubtedly revolutionized the industry, improving processes and user experience alike. From streamlined loan applications to enhanced data analytics, automation of routine tasks to personalized customer service, technology has paved the way for a more efficient and inclusive lending ecosystem. As technology continues to evolve, the commercial lending sector can expect further advancements, reinforcing its role as a catalyst for economic growth and prosperity. Nevertheless, it is crucial to strike a balance between technological innovation and human expertise, ensuring that the benefits of technology are harnessed responsibly and sustainably in the future.

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July 12, 2023
Demystifying Incoterms: A Guide for Global Traders

Exporters and importers must traverse a complex web of regulations and processes in the world of international trade. Understanding Incoterms is an important part of this procedure. But what are Incoterms, and why do exporters and importers need to know about them? In this post, we will debunk Incoterms, explain their meaning, and look at how they are used in trade finance around the world.

What are Incoterms?

Incoterms are a set of standardised regulations established by the International Chamber of Commerce (ICC). These rules specify the obligations, risks, and expenses connected with international commerce transactions involving the transportation and delivery of commodities. Incoterms guarantee that both parties involved in a transaction understand their responsibilities, reducing misunderstandings and disagreements.

Why are Incoterms so important to exporters and importers?

1. Clarity and Communication: Incoterms serve as a common language for exporters and importers, ensuring that all parties involved understand the trade’s terms and circumstances. Incoterms remove ambiguity and encourage successful communication by defining each party’s duties.

2. Risk and Cost Allocation: Understanding Incoterms assists exporters and importers in determining who bears the risks and expenses involved with goods transportation, insurance, and customs clearance. Unexpected expenses and disagreements are avoided when these duties are clearly defined, allowing traders to make educated judgements.

3. Legal Compliance: Because Incoterms are widely recognised and acknowledged in international trade, they are an important instrument for guaranteeing legal compliance. Exporters and importers can negotiate complex customs procedures and complete their legal duties by following these principles.

The Use of Incoterms in Global Trade and Finance:

1. Global Consistency: Incoterms are generally recognised and used throughout the world. They make trade activities run more smoothly by offering a standardised framework that crosses cultural, legal, and linguistic obstacles. Incoterms ensure a shared understanding of trade obligations whether you’re trading with partners in Europe, Asia, or anywhere else in the world.

2. Trade Finance: Incoterms are important in trade finance because they determine when ownership and risk move from the seller to the buyer. When granting letters of credit or other trade finance instruments, banks and financial institutions need this information. Incoterms reduce financial risks and promote secure payment processes by precisely specifying the parameters of the transaction.

3. Selecting the proper Incoterm: Exporters and importers must carefully choose the proper Incoterm for their individual trade transaction. This decision is influenced by factors such as the nature of the commodities, the desired level of control, and the buyer-seller relationship. Understanding the various Incoterms and their ramifications allows merchants to negotiate better terms and maintain a smooth and efficient supply chain.

What are the Incoterms used in global trade finance?

1. EXW (Ex Works):
The seller makes the goods available at their premises, and the buyer is responsible for all transportation, customs clearance, and risk from that point onward.

2. FCA (Free Carrier):
The seller delivers the goods to a carrier or another nominated party at a specified location. The buyer is responsible for transportation and any costs incurred after delivery.

3. CPT (Carriage Paid To):
The seller arranges and pays for the transportation of goods to the agreed-upon destination. However, the risk transfers to the buyer once the goods are handed over to the carrier.

4. CIP (Carriage and Insurance Paid To):
Similar to CPT, the seller is responsible for transportation to the agreed destination and also arranges insurance against the buyer’s risk of loss or damage during transit.

5. DAP (Delivered at Place):
The seller delivers the goods to the buyer at a specified location, ready for unloading. The seller bears the risks and costs of transportation to that point, excluding import customs clearance.

6. DDP (Delivered Duty Paid):
The seller is responsible for delivering the goods to the buyer, ready for unloading, and assumes all risks and costs, including customs duties and taxes.

7. FAS (Free Alongside Ship):
The seller is responsible for delivering the goods alongside the vessel at the specified port of shipment. The buyer assumes all risks and costs from that point, including loading the goods onto the ship and clearing customs.

8. FOB (Free on Board):
The seller is responsible for delivering the goods on board the vessel at the specified port of shipment. The buyer assumes all risks and costs from that point, including transportation, insurance, and customs clearance.

9. CFR (Cost and Freight):
The seller arranges and pays for the transportation of goods to the specified port of destination. However, the risk transfers to the buyer once the goods are on board the vessel.

10. CIF (Cost, Insurance, and Freight):
Similar to CFR, the seller arranges transportation to the specified port of destination and also provides insurance against the buyer’s risk of loss or damage during transit.

11. CIP (Carriage and Insurance Paid):
The seller is responsible for the carriage and insurance of goods to the agreed destination. The risk transfers to the buyer when the goods are handed over to the carrier.

Conclusion:

In the dynamic world of international trade, Incoterms serve as a vital tool for exporters and importers. As you venture into the exciting realm of global trade, take the time to familiarize yourself with Incoterms. They will empower you to make informed decisions, mitigate risks, and build successful business relationships across borders.

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June 5,2023
Understanding Commercial Lending: What You Need to Know

Commercial lending plays a vital role in providing businesses with the necessary financial support to fuel their operations, expansion plans and technological advancements. This article aims to provide a comprehensive overview of commercial lending, its various types and the advantages and disadvantages it offers. Additionally, we will highlight the significance of invoice finance as a primary form of commercial lending.

Definition

Commercial lending encompasses a wide range of financial services that cater to the borrowing needs of businesses. It involves providing funds to companies to meet their operational requirements, such as purchasing inventory, expanding facilities, or investing in new technologies. Unlike consumer lending, commercial lending focuses on supporting the growth and development of businesses.

Who Can Access Commercial Lending?

Commercial lending is accessible to a broad range of entities, including small and medium-sized enterprises (SMEs), large corporations, exporters, importers, and institutional and accredited investors. Whether you are a business owner seeking capital or an investor looking to provide funding, commercial lending offers solutions tailored to your specific needs.

Types of Commercial Lending

Business Loans: Business loans are a common form of commercial lending, providing businesses with a lump sum of capital that can be used for various purposes. These loans often require collateral and are subject to repayment terms, interest rates, and credit assessments.

Invoice Financing: Invoice financing, also known as invoice factoring, is a type of commercial lending that focuses on leveraging outstanding invoices for immediate working capital. Companies like Incomlend offer tech-enabled invoice finance solutions, allowing businesses to upload their invoices to a marketplace and receive funding within days.

Equipment Leasing: Equipment leasing provides businesses with the option to rent or lease necessary equipment rather than purchasing it outright. This form of commercial lending allows companies to access advanced machinery and technology without a large upfront investment.

Invoice Finance as a Primary Form of Commercial Lending

Invoice finance is a type of commercial lending that allows businesses to access the cash tied up in their unpaid invoices. This can be a valuable source of funding for businesses that are struggling to meet their short-term cash flow needs.

Invoice finance works by selling unpaid invoices to a third-party finance company. The finance company then pays the business a percentage of the invoice value upfront, with the remaining balance being paid when the invoice is due. This can provide businesses with the cash they need to cover their expenses, make payroll, or invest in growth.

There are a number of benefits to invoice finance, including:

  • Quick access to cash: Invoice finance can provide businesses with quick access to cash, which can be essential for meeting short-term cash flow needs.
  • Competitive interest rates: Invoice finance typically has competitive interest rates, which can help businesses save money.
  • No collateral required: Invoice finance typically does not require collateral, which can be a major advantage for businesses that do not have assets to secure a loan.

If you are a business that is struggling to meet your short-term cash flow needs, invoice finance may be a viable option for you. Contact a commercial lender today to learn more about how invoice finance can help your business.

Advantages of Commercial Lending

Access to Capital: Commercial lending provides businesses with the capital they need to invest in their growth, meet operational expenses, and seize market opportunities. It offers a reliable source of funding that aligns with the unique requirements of each business.

Flexibility: Commercial lending solutions are flexible, allowing businesses to choose the type and amount of financing that suits their specific needs. Whether it’s a short-term bridge loan or a long-term business loan, commercial lending offers tailored options to address different financial situations.

Faster Funding: Invoice financing, in particular, provides businesses with rapid access to working capital by leveraging outstanding invoices. This allows companies to maintain a healthy cash flow and meet their immediate financial obligations.

Disadvantages of Commercial Lending

Interest Rates and Fees: Commercial lending often involves interest rates and additional fees that businesses must consider. It is important to carefully evaluate the terms and conditions of the lending agreement to ensure the cost of borrowing aligns with the expected return on investment.

Credit Assessment: Commercial lending typically involves credit assessments, where lenders evaluate the creditworthiness of the borrowing entity. This can pose challenges for businesses with lower credit scores or limited credit history.

How to Get Started and Access Commercial Lending

To access commercial lending, businesses can follow these steps:

Identify Funding Needs: Determine the specific financial requirements of your business, whether it’s for working capital, equipment acquisition, or expansion plans.

Research Lenders/Providers: Explore different lenders and their offerings to find the most suitable fit for your business. Consider factors such as interest rates, repayment terms, geo-targeted expertise and case studies.

Prepare Documentation: Gather the necessary documentation, including financial statements, tax returns, and business plans, to support your loan application.

Submit Application: Complete the loan application process by submitting the required documents to the chosen lender. Be prepared to answer any additional questions or provide further information as requested.

Conclusion

Commercial lending plays a crucial role in fueling the growth and success of businesses across various industries. Whether through business loans, invoice financing, or equipment leasing, commercial lending offers flexible and tailored solutions to meet the unique financial needs of companies. Understanding the different types of commercial lending and carefully evaluating the advantages and disadvantages can help businesses make informed decisions and secure the funding required to thrive in today’s competitive market.

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May 10, 2023
Solving the Global Logistics Puzzle: How to Piece Together Your Export Operations with Working Capital Financing.

Maintaining operations as an exporter can be a steep challenge. International trade markets can sometimes feel difficult to navigate, and exporters, particularly ones operating with trade credit, can face challenges associated with logistics as they contend with the hurdles sometimes associated with international trade, such as the risk of non-payment, lengthy payment terms, fluctuations in exchange rates, and even unexpected instability.

Naturally, exporting can present challenges in maintaining healthy cash flow and funding operations in order to generate revenue. This can, unfortunately, become a self-exacerbating problem. Delays in receivable payments that disrupt operations and lead to an inability to fulfill further orders can create further cash management problems, making the problem of securing funding solutions worse.

In order to address these challenges, some organizations might utilize financing solutions designed for exporters, some of which are aimed at easing burdens typically associated with the export market.

Financing and exporting

Exporting goods for revenue can make it particularly challenging to meet cash flow needs for a variety of reasons. Often these reasons include difficulties that can arise as a result of exporting in markets that are vastly different from domestic markets in many ways. Exporters can face challenges associated with operating with importers who are accustomed to different payment terms, fluctuations in exchange rates between global currencies, and more. As a result, sourcing funds to operate can sometimes seem like an uphill battle, even using traditional banking methods.

Supply chain finance and other types of financing solutions for exporters aim to potentially ease some of these burdens by creating financing options that are tailored to businesses like exporters who face unique challenges in maintaining sufficient cash flow to continue operations, fulfill exports, and ultimately, drive revenue.

Financial technology has shaped the financing process for many organizations and helps drive many of the services designed to help export companies overcome cash flow issues. Online platforms might help companies find financing solutions, for example.

Cross border finance can be used to help organizations operate internationally. Financing solutions for exporters might also be utilized in order to expand operations or break into emerging markets.

SME finance aimed at global markets isn’t only relevant to exporters. At a different point in the supply chain, import finance can similarly be used to support export operations, as they can be used to enable importers to request goods.

Financing options for exporters

There are many trade finance options available to exporters that can be used to address deficiencies in working capital sufficient to sustain exporting operations. As sustaining operations is crucial to any business, and fulfillment of orders to exporters is certainly no exception, some global finance options may be able to enable exporters in critical ways. Supply chain finance and other export finance might aim to ease burdens associated with cash flow lags and logistics, for example. We’ll explore some of the financing solutions exporters can use in addition to or alternatively to traditional banking. These might vary; some financing solutions may rely on collateral while others may simply rely on creditworthiness. Non recourse finance might be used by exporters in order to meet cash flow needs.

Invoice financing

One of the issues that exporters sometimes face is a significant gap in time between when they spend money to fulfill deliveries and when they actually receive payment for said deliveries. Naturally, this can make invoice management all the more crucial for exporters. Still, businesses with unpaid invoices, may be able to leverage the theoretical trade receivables value of those invoices through invoice financing. This might also be called receivables finance.

Invoice discounting

This is a financing option that can allow a company to borrow funds using their unpaid invoices as collateral. Through invoice discounting, an exporting company might be able to sell their unpaid invoices to another entity, called a factor, generally at a discount. The factoring company can give the exporting company an advance, then seek payment for the unpaid invoices, and pay the exporting business the difference between the original advance and the payments received for invoices, minus any fees the factor might charge as well as the discount.

Invoice factoring

Similar to invoice discounting, invoice factoring involves leveraging the value of unpaid invoices in order to free up funds that may be critical to operations such as future deliveries. With invoice factoring, however, rather than borrowing funds using invoices as collateral, a business can simply sell their unpaid invoices to another entity. They might receive less, in exchange, than their invoices could theoretically be worth, but they may be able to access needed working capital for international trade quickly, as well as shed off the risk of nonpayment to another organization.

Purchase order finance

Much like invoice discounting, this enables companies to utilize theoretical future funds to secure an advance against, in the present for international trade. However, with purchase order financing, rather than using unpaid invoices as collateral, an organization might use purchase orders.

Collateral free financing

Some businesses earning revenue through exports and operating in international trade markets may seek small business finance, but may not have access to assets that can be used as sufficient collateral to assuage concerns about credit risk and finance operations. However, they may need fast funding in order to sustain operations. As such, some organizations might seek out financing options that don’t require collateral. With sufficient creditworthiness, and through meeting certain requirements like minimum turnover, they may be able to access funds through collateral free finance. These options might include lines of credit designed for exporters, export credit insurance, a letter of credit, and more.

Additional considerations and approaches

There are many other financing services available to exporters. We’ve explored some of the common ways exporters can utilize financing in addition to or as an alternative to banking in order to meet vital working capital needs while operating in global markets and exporting goods. However, there are many ways that exporters can manage cash flow, and optimize operations. For example, invoice verification is a simple way to open a line of communication with importers, which can help both parties avoid unnecessary future disputes, and may even lead to more favorable payment outcomes.

The bottom line

Each company is unique. Accordingly, exporters should independently  weigh the benefits and risks of any financing they seek. Still, there are many financing options available to businesses that operate in global markets and export goods–many of which are specifically focused on helping address challenges that can be associated with exporting goods. Some of these challenges might include cash flow management, the risk of non-payment, and the potential for miscommunication.

Through novel financing solutions driven by technology, and designed to help exporters operate, exporters may be able to better sustain operations successfully. To learn more about how financing solutions can help you with your cash flow management, be sure to reach out to us at Incomlend for a free consultation.

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April 15, 2023
Trade Finance and Fintech: What European importers might want to know

As the global trade finance gap widens, European importers should explore new technologies to successfully compete in the marketplace.

Europe is one of the most economically dynamic regions in the world: The European Union (EU) had a gross domestic product of US$16.6 trillion, which amounted to a full one-sixth of the entire world. The region is also a major importer, with some of the most popular categories being metals; machinery and equipment; chemicals and chemical products; computer, electronic, and optimal products; and electrical equipment.

Importers face a challenging competitive landscape in the EU. They have to contend with the complexity of importing from multiple markets and possibly redistributing across just as many markets across the EU. They face stiff competition from importers not only in their own country but from those in neighbouring countries, especially those that have a coast.

On top of these challenges, European importers have to deal with the same problems that importers in other markets have to contend with. These are mainly struggles with working capital. While they have favourable terms with exporters, who they usually do not need to pay for as long as 90 or 120 days, they still face a crunch in cash flow as a small business.

This lack of working capital affects how they do business: they cannot increase the volume of the products they already import, they cannot expand the type of products they import, and they cannot work with a greater diversity of exporters.

To overcome these challenges, European importers might choose to excel at trade finance. To do so, they must be made aware of several key facts and trends. Let’s go through some of them together.

The trade finance gap is monumental.

The trade finance gap stands at US$1.7 trillion, according to the Asian Development Bank

This is the shortfall between importers and exporters who need capital, and the amount of capital that they are unable to borrow.

Most importers, in other words, cannot get the capital they need. This stems from the fact that they are likely trying to obtain the most common source of capital, bank loans. But as traditional financial institutions, banks have an extensive amount of requirements that most importers cannot meet.

In this kind of environment, the importer who has more capital has a doubly more advantage, as most of their peers cannot get it.

Trade finance is intersecting with technology.

Most people think of fintech as largely a consumer space. There are digital banks; mobile money platforms; buy now, pay later apps, and so on. But fintech is also transforming the business-to-business space, and trade finance is no exception.

This transformation is driven by some of the technologies that dominate headlines. Some companies are putting their record-keeping, including both financial and non-financial information, on the blockchain. Since the blockchain is a digital ledger, one that is famously immutable, this secures the organization’s data. Other companies are even experimenting with artificial intelligence for the risk assessment process.

European importers need to participate in these shifts. While trade finance has long been a traditional industry, the entrance of cutting-edge tech means that they have to get on board. The European importers who embrace these new solutions will find themselves at an advantage over their more conservative peers.

There are alternative forms of financing beyond bank loans.

One of the most innovative new forms of financing is supply chain financing, or reverse factoring. The way it works is simple: the importer involves the participation of a third party or supply chain financier to enable their suppliers to receive early payments against export invoices. This solution is innovative for several reasons. The first is speed: the process is much faster than a traditional business loan. Besides, it doesn’t figure as a loan on a company’s balance sheet.

Secondly, the importer extends his credit line to his suppliers, who will be happy to receive their funds right after shipping the goods.

Lastly, supply chain financing is more accessible. While most third-party factoring companies do require trade history between partners, revenue thresholds, and other requirements, these are considerably less stringent than banks. This put supply chain financing within the reach of many more businesses stuck in the trade finance gap.

Trade finance in Europe

Trade finance is ever-changing, and Europe will be at the forefront of these shifts, as a major importing hub in the world. Importers can choose to embrace these changes: see finance as a competitive advantage, seek out new technologies that enhance their supply chain or trade finance, and strive for alternative forms of capital. The importers who lead these changes can grow their importing business, expanding to include new products, markets, and customers.

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March 23, 2023
Social impact through SDGs: Our commitment to ESG

In the business world, the organizations most associated with social impact are social enterprises, foundations, and B corporations. In sharp contrast, enterprises in the supply chain, such as importers and exporters, are rarely viewed as organizations that make a difference. Most see them as purely profit-driven enterprises bent on either maximizing how much they can sell goods for (i.e., exporters), or how much they can sell and redistribute them for (i.e., importers).

But enterprises on the supply chain can make a difference. One avenue is through invoice financing. At Incomlend, we measure our commitment to environmental, social, and governance (ESG) through our varied impact on the sustainable development goals of the United Nations for 2030.

Most people have seen the SDGs. While it has become increasingly popular for organizations to say they target the SDGs, for many this is only lip service. The fulfillment of their business goals does not actually contribute to certain SDGs – they just vaguely mention them.

With the goodwill that can arise from affecting social change, it’s easy to fall into the trap of only having a loose connection to the SDGs. But we have so far successfully avoided this pitfall. While Incomlend arguably addresses more than a handful of SDGs, the business makes a substantial impact on each one.

To showcase this impact on SDGs – by extension, our commitment to ESG – it’s important to illustrate how we work on several of them.

SDG 5 – Gender equality – It’s difficult for any business owner in the supply chain to receive financing. It’s even more difficult for women-led businesses to receive financing. This should, of course, not be the case. Women deserve equal access to financing, if not more so, to make up for the historical disparities in financing between genders.

Unfortunately, traditional financing methods put women at a disadvantage. Most are people- and process-driven, such as trying to obtain a bank loan. The person will have to come in, submit their necessary paperwork, and wait. Because bank financing is so relationship driven, the process is easily prone to bias – either in favor of men or even against women, – that altogether reduces the number of women who raise money.

Invoice financing breaks this glass ceiling. Because invoicing platforms are largely automated, they minimize bias. Importers or exporters just upload their necessary requirements on the platform and they can have cash in hand in as little as 48 hours. By reducing the opportunity for bias, invoice financing can provide more working capital to women-owned or -led businesses.

Incomlend strongly believes in gender equality, which we try to make evident in our very workforce. Across the entire company, 33% are women. This notably increases at the management level, where a full 40% of department heads are women. By having a

SDG 8 – Decent work and economic growth – The economic outlook for 2023 is bleak. The world may face a recession, and as businesses on the frontlines of global trade, importers and exporters may suffer the most. This problem will be exacerbated by the fact that – in addition to having a hard time obtaining financing – they will often struggle with cash flow as it is. Exporters, for example, may have to wait as far out as 120 days to be paid for goods that they sent out immediately. These business practices ensure that cash flow will be tight, which will make it difficult for these enterprises to grow.

Invoice financing provides these importers and exporters an avenue for much needed working capital. Exporters can upload an export receivable and get paid immediately, rather than having to wait three or four months for payment. Importers can also benefit: After uploading the export receivable of a trade partner, this exporter will be paid immediately, and the importer will have up to 90 or 120 days, depending on the terms, to pay back the platform.

In both importer- and exporter-led invoice financing, businesses gain crucial working capital. While this can be used for a variety of purposes, including everything from hiring more staff, purchasing more products, and expanding into new markets, they will have one ultimate impact: They help these businesses grow, which creates jobs and contributes to the economic growth of their sub-sector within the supply chain.

SDG 12 – Responsible consumption and production – Many mistakenly interpret this SDG to only apply to how things are made, but it also applies one step before that: how things are financed. In short, the supply chain industry must make it a point to provide sustainable financing to importers and exporters.

Unfortunately, this is not the case. Most bank loans, for example, place onerous terms on importers and exporters, which keep them trapped in a cycle of debt. In some cases, these bad loans may put businesses in such a precarious financial position that they go bankrupt. Some even lose assets when the loans are collateralized.

Businesses do not only deserve financing – they also deserve fair financing to help them produce and distribute products. Invoice financing presents this very option, as the requirements, fees, and terms are all extremely fair – some would even go so far as to call them business-centric. In this way, Incomlend contributes to the responsible production of goods across the supply chain creating social impact.

As we can see from these three SDGs alone, invoice financing is an avenue to create social impact. By congregating on a platform like Incomlend, importers, exporters, and investors do not only participate in transactions – they transform the supply chain for the better.

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February 7, 2023
Accessible Finance: Why Invoice Financing is Within Your Reach

At US$1.7 trillion, the finance gap is astounding. Businesses are simply not getting the capital they need to sustain and grow their businesses. Part of the reason for this shortfall is where they are trying to access their capital.

Because banks are the financial institutions around which most businesses are built, enterprises in need of funds most often seek bank loans. These are notoriously inaccessible for a variety of different reasons. The first is the requirements themselves. Banks, because they operate in a highly regulated industry, will demand prospective borrowers furnish a litany of requirements, including everything from extensive financial information to trade references.

These requirements are couched into a process full of red tape. Businesses not only need to submit these requirements, but they have to go through multiple back-and-forth sessions with the bank. There is, in short, plenty of red tapes. This would all be fine if most businesses walked away with capital from the bureaucracy, but such is not the case. The businesses who are turned down for a bank loan will have just wasted time that they could have better spent on seeking more accessible financing or growing their business. This problem is compounded by the fact that there may be macroeconomic forces, such as a surge in COVID-19, that makes working capital even more important.

Because bank loans can be difficult to get, many business leaders assume that this holds true for all forms of financing. But such is not the case. Invoice financing, for example, can be more accessible than bank loans by leaps and bounds. At Incomlend, we make it a point to extend financial inclusion to more businesses in need of capital. Central to this mission is market education: Since many people have misconceptions about financing in general and invoice financing in particular, it is our role to provide them with advice. To this end, we want to show that invoice financing is more accessible than they may think. Invoice financing, in other words, is well within their reach, should they prepare the proper requirements.

Collateral-free financing

Unlike banks, which usually require some form of collateral, invoice financing is a form of collateral-free financing. In other words, no form of collateral is required by either trade partner. Our solution doesn’t require collateral, and goes off-the-balance-sheet because it doesn’t figure as a loan. Invoice financing is thus ideal for companies that do not want to over-leverage themselves with debt.

Book a free discovery call 

Geographic Eligibility

We are happy to work with businesses in certain markets around the world. These are some of the supplier countries we cover:

    • Singapore
    • Hong Kong
    • China
    • India
    • Bangladesh
    • Pakistan
    • Vietnam
    • Malaysia
    • Indonesia
    • United Arab Emirates
    • Latin America

 

While we are especially eager to work with businesses headquartered from these countries, or who have a trade partner operating from one of them, we also work with other markets.

Trade History

To obtain invoice financing on a particular receivable, the trade partner cannot be new. In other words, the importer or exporter must have an existing trade history with this partner that pre-dates the receivable that they wish to factor in. There is a minimum of one year of doing business with one another, which provides a clear track record that makes it easy to render a decision on the organization’s eligibility for invoice financing.

Goods

Incomlend is industry-agnostic, save for perishable goods, dangerous goods, and coal. We work with businesses across a whole range of industries, including everything from apparel to healthcare. As such, we welcome applications from a variety of industries. On our eligibility form, businesses can identify as being in apparel, automotive, construction, chemicals, electronics, healthcare, manufacturing, metals, packaging, or fast-moving consumer goods. If the business does not fit into any of those categories, it can simply list “other.”

By being industry-agnostic, we have a greater chance of helping all the businesses in the supply chain in need of working capital.

Revenue

Many bank loans are accessible to only the largest of businesses. At Incomlend, there is a broader range of businesses to that we can provide invoice factoring – again because we want our services to be as inclusive as possible. To this end, our eligibility form has several tiers of revenue that businesses can classify themselves into, and we make case-by-case decisions for both importers and exporters.

Upon submitting the information above on our eligibility form, importers and exporters should hear from our team soon, who will provide a decision based on the information submitted.

Importers and exporters who are approved for Incomlend enjoy a user-centric experience as it comes to actually obtaining the working capital they need. Upon approval, these businesses can proceed to Incomlend, submit the export receivable that they wish factored, and then get their money within 48 hours. If they are an exporter, it will be their export receivable that is paid. If they are an importer, it will be the export receivable of their trade partner that is paid, and then the importer gains up to 90 or 120 days to pay the value back, depending on the terms.

 

As can be seen from the requirements and process listed above, invoice financing is very accessible for importers and exporters in the supply chain. Businesses would be wise to try this form of financing to obtain the working capital they need, so they can grow exponentially.

Enquire now about our financing solutions: book a free discovery call with our experts.

 

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February 1, 2023
Expertise at Incomlend: How We Make Invoice Financing Work

In fintech, there are many platforms that are made by what you could call mercenaries. In other words, these business leaders primarily built the business to seize upon a financial opportunity that they recognized in the market. In all likelihood, they want to scale the business, gain the expertise and eventually flip it to another larger corporate buyer.

These types of business leaders often have technological skills and business acumen, but they lack the deep domain expertise to truly solve their space’s problems. Domain expertise is necessary, after all, to build a solution that is customer-centric.

This is not the case at Incomlend. Since the company’s founding in 2016, the organization has amassed a wealth of talent. These are not just engineers, and these are not just salespeople. There is a concentration of domain expertise related to the four areas that are necessary for a truly customer-centric invoice financing platform: supply chain, financing, investing, and technology.

By documenting our expertise, we hope to convey to potential users of Incomlend that this is a trusted invoice financing platform, owing to the fact that we understand the problems of our users and we have the skills to address them.

Supply chain

Mastering the supply chain cannot happen overnight. Many of the team at Incomlend has experience working in the supply chain of larger corporations, or even at importers and exporters. As a result, we understand their pain points, most especially as it relates to working capital. Both sides of the supply chain are locked in a push-pull battle for working capital that harms both parties.

Although they deliver goods immediately, exporters may not be paid for as long as 90, 120 days and sometimes even more. This makes their working capital highly cyclical – there may be periods where they are flush with cash and periods where they are severely lacking, due to the cadences of these long payment periods. The same goes for importers, who may need capital to pay off their trade partners.

At Incomlend, there is a deep understanding and expertise of the struggles in cash flow that both importers and exporters face.

Financing
The team at Incomlend are not just experts in invoice financing but in all financing. There is strong knowledge, in particular, about bank financing and the associated challenges that come with it for small/medium businesses. When seeking trade finance through a bank, most importers and exporters struggle. To begin with, the requirements are substantial – the amount of paperwork required would trouble even a large corporation. The terms may also be highly in favor of the banks, such as requiring collaterals.

Even in the few cases where enterprises meet these requirements, there is a high opportunity cost. They may need to wait as long as several months for their cash to arrive in their account. In the event they are not approved, all that waiting has now amounted to a large opportunity cost: The time they spent applying could have been used for other means of enhancing their financial position.

The Incomlend understands the inaccessibility of bank financing, which strengthens the team’s resolve to make working capital more accessible.

Investing
An invoice financing platform cannot work with only importers and exporters. For an invoice financing platform to work, there need to be investors who are willing to finance invoices. For there to be investors, the platform must take into consideration their unique needs, so they will be attracted to provide financing on your platform versus others

Incomlend understands the needs of investors, as many of our team members come from retail or institutional investment backgrounds. This is reflected in our platform and through our expertise. Investors who sign up have high flexibility: They can choose whether to invest in receivables or groups of receivables and when to do so. As a result, they gain access to a risk-adjusted asset class that can offer stable returns.

Because Incomlend understands the needs of investors, they will not be in short supply on the platform. There will be enough importers, exporters, and, most crucially, investors, for the ecosystem to continually succeed on a day-to-day basis.

Technology

While most mercenaries approach platform-building from a purely technological perspective, the importance of innovative technology should not be discounted. The team at Incomlend shares this belief. Our tech team at Incomlend is composed of many talented engineers, web developers, UI/UX specialists, data scientists, data analysts, and another technical talents.

The calibre of our tech team is evident in the product itself. While it would have been very easy to make a complex product – since enterprises are accustomed to bloated software – the team made a platform that is arguably as easy to use as any mass-market consumer product. For instance, importers and exporters can inquire about their eligibility with a few easy clicks. When they are approved, they can just upload the documents required along with the receivables that they wish to factor in. This ease of use is as much a philosophy as it is product-driven: One of our missions at Incomlend is to make it as easy for businesses to obtain the working capital they need. This mission can only be accomplished through intuitive design, scalable engineering practices, and innovative features.

Through the unique combination of expertise in the supply chain, financing, investing, and technology, the Incomlend team has quickly built a platform that truly speaks to the unique needs of customers.

 

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January 17, 2023
Why some businesses may want to consider invoice financing over banks

When businesses are in need of financing, they usually choose between several options. These range from more traditional channels, like bank loans, to more recent innovations, such as invoice financing platforms.

Despite what some lenders may say, no solution is categorically better than others. Each has its own merits depending on the needs of the organization. Business leaders are mistaken in looking for the best financing solution – they should be searching for the best financing solution for them.

The operative words in that sentence are “for them.” Choosing a financing source is as much an internal search as it is an external one: business leaders should examine their strategic goals, key metrics like working capital, operational history, and other variables. This self-analysis will enable them to choose the financing solution that makes the most sense for their organization.

To help business leaders make the best choice, we have compiled several reasons why some business leaders may want to consider invoice factoring as an alternative to bank financing. Founded in 2016, Incomlend is a global leader in invoice financing for trade finance, so we are deeply familiar with the pros of this financing method vis-a-vis banks.

For your consideration, they are these:

1. Bank loans may not be as readily available as invoice financing.
Contrary to what some media portray, a business owner cannot just walk into a bank and request a loan. He will usually need a long operational history with the bank in question. Requirements will vary per market, but they may include a minimum number of years of maintaining accounts there, a minimum maintaining balance over this period, minimum revenue, and other such needs.

Because most businesses maintain only a few bank accounts, they will naturally have only a few financing choices, assuming they even meet the requirements. If the business owner does not like the terms offered by a bank, he is in tough luck. He may not have the financial history with another bank to draw a competing offer.

In contrast to this approach, a business seeking invoice financing can directly check its eligibility with the invoice financing platform. So long as the business meets all the requirements, they can avail of invoice financing – there is no need to have a long historical relationship with the platform as banks often demand, even though some trade history between the trade partners is required. This makes invoice financing arguably more accessible than bank loans for some organizations.

2. Bank loans take longer to acquire than invoice financing

As banks operate in a very traditional industry that is highly regulated, the process of obtaining a bank loan is understandably very intensive. The process will of course vary from bank to bank, but generally speaking, the time-to-money (from application to disbursement) can last up to several weeks or even months.

Invoice financing operates on a much quicker timeline. After submitting their eligibility requirements and getting approved, provided that both parties are responsive in submitting the documentation needed, an importer or exporter can then upload the export receivable that they wish factored. Within as little as two days from invoice upload, the enterprise can have cash in the bank.

The significantly quicker time-to-money process with invoice financing is not just a matter of convenience. Businesses in need of capital do not have the luxury of time. Getting cash sooner means that they can deploy it to more productive use sooner, whether that means re-investing in their business, or using it for revenue-generating activities.

3. Invoice financing protects your business reputation.

Apart from the requirements documented above, another common task of bank loans is trade references, often from customers of the business seeking a loan.

This requirement may represent a business risk for the importer or exporter. The first is reputational: other organizations may be wary of a business that seems unstable by virtue of its seeking a business loan.

Bad partners may use this to their advantage. Importers and exporters negotiate on terms all the time, as customers and vendors. If the importer knows that the exporter is pursuing a bank loan because they were asked to serve as a credit reference, the importer can use this to their advantage at the negotiating table. The importer could pressure the exporter into accepting worse terms, knowing that they are experiencing a financial crunch of some kind.

Invoice financing, in contrast, does not expose enterprises to either of these risks. They do not need to harm their business reputation by making others aware they are pursuing capital. As a result, they do not come to the negotiation table at a disadvantage.

Invoice financing, in fact, creates more collaborative relationships between importers and exporters. In the case of importers, for example, they do not have to delay payments to their partner exporter in an effort to preserve their own working capital. With invoice financing, their partner is paid immediately, and the importer is tasked with paying back the platform. This preserves their working relationship and may even provide benefits to the importer, such as when they need special requirements or favors from their export partner.

The decision is yours

Again, there is no right or wrong option for businesses choosing between bank loans or invoice factoring. There may be businesses better suited for bank loans. If, on the other hand, an importer or exporter does not have an existing financial history with a particular bank, needs their capital much sooner than a timeline of weeks or months, and wants to be spared the business risk that comes with asking for credit references, invoice financing may be the best option.

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January 11, 2023
Better Terms, Better Business

Why businesses must think beyond sales and revenue

Although a contract between an importer and exporter can span dozens of pages and include hundreds of different items, the supplier tends to focus disproportionately on one: the sales price. From this sticker tag, the importer can calculate the gross profit on this particular deal and the net profit.

Paying close attention to these figures—the sales price, the gross revenue, and the net revenue—is of course crucial. Overlooking these numbers will cause any organization to quickly go out of business. The issue is that most exporters concentrate solely on these figures at the exclusion of equally important measures, such as payment terms.

The focus on just a handful of figures is rooted in the fact that contracts are driven primarily by salespeople. Since their performance and incentives are tied purely to the business development figures mentioned above, they naturally put all their resources into negotiating the highest possible sales price. These salespeople will try not to budge from a given price and instead upsell importers with additional goods, lock them into more business, or find other creative ways to charge more.

While these efforts are well-intentioned, the problem with these charges is that they are just that: charges. These sales exist only on paper until an exporter collects, which can be a difficult task. On top of having to deal with terms that are inherently favorable to the importer (with payment terms lasting up to several months, even though goods are delivered immediately), the exporter also has to contend with late payment or non-payment. Blank swan events, like COVID-19, can push importers to further hold payments to suppliers, even though cash flow during these incidents affects everyone, not just them.

From this vantage point, it would not be unreasonable to view the sales and revenue figures for exporters as almost a vanity metric. A vanity metric is a measure that professionals may meticulously track and celebrate, even though it may make no meaningful difference to the business. For an eCommerce website, a vanity metric may be pageviews, if those site visitors are not ultimately converting into customers. For a SaaS business, a vanity metric may be users, if few signups are using the product beyond the initial registration.

In much the same way, one could argue that the business-development figures in the supply chain are also partly vanity metrics because they don’t give a full indication of business success. An exporter, for example, could be posting record sales and revenues on paper, but the business reality could differ dramatically. If any of those transactions are done with importers who have negotiated favorable payment terms, tend to pay late, or even worse, meet both of these conditions, the exporter with the all-time sales may actually be cash poor.

With little working capital, the business may eventually be unable to fulfill some of those orders, which will cause the business to come crumbling down. Some importers may cancel their orders due to late delivery of goods, others will switch to other suppliers, and still, others may hold the exporter financially or legally responsible for the goods not being delivered on time. The operative word in vanity metrics is vanity: They may make business leaders feel good in the short term, but they merely cover up deeper, more serious problems that are bound to emerge in the medium- to long term.

A finance-driven approach to business development

To succeed, businesses should not only take the lens of business development when striking deals with importers – they must also carefully evaluate each contract with finance in mind. This process should be done collaboratively: Rather than just asking an exporter’s salespeople to also consider finance metrics, exporters should bring in finance professionals to weigh the pros and cons of each deal. Since working capital is integral to any business, the metric that finance professionals will likely pay the most attention to is the payment terms. Simply put, they will advocate for as much of the money as soon as possible. The finance team may ask for some capital to be paid up front as a downpayment, and the rest to be paid within a much smaller window than is customary.

This is what the exporter’s finance team will request, but not what they will necessarily get. The importer faces the same business demands as the exporter: They also have to closely guard their working capital. To free up cash flow, the importer will naturally push back against the shorter payment terms in favor of a longer window. This is the friction inherent to any exporter-importer relationship: For the exporter to win (i.e. get shorter payment terms), the importer must lose (i.e. pay more capital sooner). For the importer to win (i.e., get longer payment terms), the exporter must lose (i.e., get capital much later). In this old model of the supply chain, importers and exporters are placed at odds with one another in a zero-sum game. , which sadly often includes bad actors who may outright lie for a better negotiating position.

In an environment with directly oppositional goals, the exporter will undoubtedly secure some wins. A handful of importers may agree to shorter payment terms, with some even conceding to some form of upfront payment. But counting on all importers to agree to pro-importer terms is not only unlikely but also a significant waste of resources. Exporters will have to commit more talent to negotiating these shorter payment terms and spend more man-hours going back and forth throughout the process.

In the end, this resource-intensive process will make a negligible difference, since few importers will agree—they hold most of the leverage, after all, as the buyer. In the event they do agree, there is no telling whether they’ll follow through. Just as importers frequently do not comply with longer payment terms, they can just as well not comply with shorter payment terms, electing to pay much later than what was agreed upon. In this scenario, the exporter is even worse off as a business, as rather than just adopt the customary terms, they wasted additional resources negotiating for pro-exporter terms that were not followed through in the end.

There is a better way than importers and exporters taking opposite sides of the proverbial negotiating table. Through the innovation of invoice financing, the two parties no longer have to be in opposition to one another when it comes to payment terms. Removing this friction, they can focus on collaborating with one another to grow the business overall rather than haggling back and forth.

This idea sounds almost too good to be true, but the way it works is simple. Let’s examine invoice financing from the exporter side. As usual, the exporter ships their goods to the importer, and then the process diverges from here. In the legacy process, exporters will have to deal with waiting for 120 days for the export receivable to be paid, meaning they’ll simply have to contend with less working capital until then. With an invoice financing platform, in contrast, exporters can be paid upfront in as little as 3 days. Even though the benefits to exporters are enormous, the transaction is fair: The export receivable is paid up to as much as 90% of its face value, and the invoice financing platform takes a small fee for its role).

By using an invoice financing platform, exporters increase their working capital, which is as important to the success of the listed sales and revenues, if not more so. With greater cash reserves, exporters can partake in more activities that grow the business, rather than simply bide time until the next export receivable is paid. Exporters can strive for economies of scale by buying more raw materials, so they can produce goods cheaper. Exporters can canvass for more partner importers, who will again be easier to work with since the presence of an invoice financing option makes each deal collaborative rather than competitive. Exporters can explore new product categories to diversify their catalogue for partner importers.

Invoice financing, in short, is a useful instrument. This innovation forces exporters to see deals not only in terms of sales and revenue but also in payment terms. By dramatically reducing the window in which they are paid, exporters can benefit from a simple formula: better terms, better business.

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January 3, 2023
What the COVID-19 surge in China may mean for the supply chain

COVID-19 cases are once again surging in China. On December 30, the World Health Organization (WHO) even met with Chinese officials from the National Health Commission and National Disease Control and Prevention Administration to discuss strategies to deal with the increasingly dire situation.

While both groups are understandably treating the resurgence of COVID-19 as a public health crisis, the problem could also spiral into being an industrial problem, as occurred with the first outbreak.

In early 2021, when COVID-19 first took hold of China before quickly spreading to the rest of the globe, the world faced one of the greatest disruptions in the supply chain in modern times. Most importers, exporters, and other enterprises in the supply chain were caught flat-footed: They went into crisis management mode, doing their best to get their goods or raw materials where they needed to be, with mixed results.

As COVID-19 once again threatens China, businesses should be better prepared. Here is how the COVID-19 surge in China may affect the global supply chain and, more importantly, what businesses can do to ensure the continuity of their supply chain.

Negotiating power shifts to exporters

In normal market conditions, the negotiating power between exporters and importers is with the latter. Importers are the customers, after all. If the situation in China continues to worsen, this power will shift to exporters. This is due to the law of supply and demand.

As it did during the first pandemic, China may take increasingly draconian measures with businesses and localities, such as shutting down borders, limiting outbound shipments at ports, and even preventing residents from leaving their homes and thus reporting to work. These measures would severely limit the number of goods available for export.

As the world’s largest exporter since 2009, China is known as the world’s factory, exporting 3.2 trillion worth of manufactured goods in 2021 alone. Viewed the opposite way, there are many importers who rely on Chinese goods and raw materials for their business. In a situation where these goods become scarce, exporters can pick and choose which importers to work with. They will naturally choose those importers that are better payees, rather than those who still request the long payment cycles.

Because importers will also be feeling a crunch in working capital, these businesses cannot simply pay their partner exporters immediately. One solution that offers a middle ground is invoice financing. With invoice financing, importers can upload an export receivable to get the exporter paid immediately, which will make their business relationship a priority even when the supply of goods is low. The importer then has a longer window in which to pay back the provider, which preserves their own cash flow.

Delays can be mitigated but not prevented

Even the best-prepared business will face disruption from a rise of COVID-19 cases in China. There will be delays in the shipments of goods and raw materials. Importers will have to find ways to adjust, such as by stockpiling products and components ahead of time, advising clients and customers of coming shortages, or even rationing out their products to end users.

But perhaps the best way to navigate this inevitable disruption is through communication. Importers will need to communicate with their partner exporters, so they can understand what delays will occur and plan and strategize accordingly. When faced with such a great disruption, exporters will be focused on restoring their own supply chain and may not have time to regularly communicate with their downstream partners. As with every business, exporters will naturally prioritize the importers they believe are important customers, as part of a key account management strategy.

Most importers will not belong in this category. They may have negotiated payment terms purely in their favor. Or worse, they may be frequent late payees or even non-payees. The few importers who regularly pay on time, such as through invoice financing, will remain in the good graces of Chinese exporters and be a strategic priority. These enterprises will get regular updates, which provides them with the second most important resource in any supply chain disruption, after the goods themselves: information.

Supply chain diversification will become multidimensional

When the COVID-19 pandemic surged throughout the world, many business leaders called for supply chain diversification. When referring to the need to diversify the supply chain, they were mostly talking about the locality.

At the national level, some were calling for businesses to choose additional suppliers outside China, so their base for goods and raw materials does not fall on one country, especially one that proved to be as susceptible to a crisis as it did. At the partner level, some were calling for businesses to diversify their partner manufacturers, suppliers, and exporters, even if they still mostly reside in China.

Both of these measures would derisk an organization, but only to an extent. To truly make a supply chain resilient, businesses need to think beyond only geography. In fact, the enterprises that will be able to best weather another supply chain disruption in China are those that diversify their business along multiple dimensions.

One important dimension to not overlook is the financial one. Importers should not have only one payment option for dealing with exporters. Relying on working capital to pay their partner exporters, at a time when cash flow may already be tight due to the looming recession, is a recipe for disaster. By diversifying their finance options to include invoice financing, importers can strengthen their financial position as it comes to working capital. Doing so is arguably as important as diversifying their partner exporters and their locations: Diversely located partners will not mean anything if there is no cash flow with which to pay them, after all.

In the end, the COVID-19 situation in China may continue to worsen, up to the point that it creates a major supply chain disruption like the previous outbreak. Since China is the world’s largest exporter, importers in particular need to be better prepared for this possibility. One means of preparation is invoice financing. By turning to invoice financing for some or all of their receivables, importers may improve access to the limited goods or raw materials that suppliers have to export, become a key clients for exporters when supply chain information is tantamount to agility, and diversify their supply chain along multiple dimensions. These importers will still no doubt be affected, but they can use this moment to once again revitalize their supply chain.

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December 28, 2022
How invoice financing can help importers in the United States

The hyper-competitive imports market in the United States

American culture is commonly portrayed as one centred around consumerism. This image may be rooted in objective reality: The United States is the number one importer in the world. In 2021 alone, the United States imported US$3.4 trillion in goods. Among the most popular categories were industrial, automotive, food and beverage, consumer, and capital goods.

American imports, in short, are a booming business. While the success of this industry as a whole is beneficial for the nation as a whole, it presents a challenging business environment for individual importers. Take the example of an importer of apparel. In a smaller market, the importer would have significantly less competition, so they would have greater leverage in negotiating terms with exporters.

In the United States, however, there may be hundreds, if not thousands of other importers in your city alone. These importers implicitly compete with their peers on price, volume, and other factors when negotiating with exporters.

In a hyper-competitive business environment like this one, American importers should search for every possible advantage. Because it would be difficult to continually negotiate with exporters – if you are not willing to buy their products on market standard terms, another importer will – it’s crucial to seek competitive advantages through other channels.

One such example is the opportunity presented by invoice financing platforms. These invoice financing platforms can provide numerous benefits to American importers. The most obvious is more favourable payment terms, but the use of an invoice financing platform can also provide deeper more strategic benefits.

The benefits of receivable financing for importers in the United States


Gain a longer time horizon for payments

The terms between each trade deal of an importer and exporter may vary. After the exports are shipped to an importer, the latter may have anywhere from 2 weeks to 90 days to pay the balance, depending on what was negotiated between the two parties. An invoice financing platform can dramatically extend this runway all the way up to 120 days.

Achieving this runway is also easy. All the American importer has to do is upload the exports receivable that they want to be paid. The invoice financing platform will pay the partner exporter immediately, and in turn, the importer will have a full 120 days to pay back the provider.

By enjoying more favourable payment terms, the importer gains significantly more working capital. This working capital can be used for more revenue-generating activities, such as importing more products with the importer, striking deals with other importers, or even investing into its sales and distribution network in the United States. The invoice financing platform enables not only better payment terms, but greater business results.

Maintain positive business relationships

Importers and exporters often have conflicting goals. Importers want to extend payment terms as much as possible, while exporters want to shorten them. Importers want to get their goods immediately, while exporters want to ship them out only after receiving some type of payment. Importers want to delay paying a balance as long as they can, while exporters want to collect as soon as they can.

These conflicting wants often strain a business relationship. When an importer regularly delays payment out of necessity, sometimes even beyond the agreed-upon terms, the exporter may write off that business as a bad payer. If delayed payments happen often enough, which is a common case, given that importers need to manage their cash flow as well, exporters may seek corrective action.

In dealing with a bad payer, the exporter may limit the volume and type of products they send to the exporter, or even choose to cut them off altogether, refusing to do further business. This type of strained or failed B2B relationship with exporters will affect the business continuity of the importer, who will now have to search high and low for another importer who can address the same product gap, a feat that may be difficult depending on the product.

With invoice financing, in contrast, an importer will never have to go through the rigamarole of alienating an exporter. Because the exporter receives payment quickly for every export receivable by the invoice financing platform, the importer maintains positive relationships with the business leaders and collections team of the exporter. As a result, both parties can focus entirely on addressing the trade gap the imported products fill.

Enjoy more discounts and other benefits

When thinking about invoice financing, importers tend to overlook how these platforms will help exporters, which will also ultimately benefit them. Most importers in the United States do business with exporters in the Global South, in countries such as India, Bangladesh, Malaysia and Vietnam. These countries are emerging markets, and the exporters operating from them tend to be micro, small, and medium-sized enterprises (MSMEs).

In the current legacy system, MSMEs struggle with cash flow. Although they tend to send out products as soon as an order is received, they may not be paid for up to 120 days. As a result, the working capital of exporters is always fluctuating, and it’s difficult to make strategic plans that grow the business, as that requires a steadier cash flow.

Invoice financing platforms help these exporters. After shipping out their goods and uploading their export receivables to the invoice financing platform, the business can have cash in the bank in as little as 48 hours. The exporter will be paid as much as 90% of the face value of the export receivable, with the invoice financing platform taking a small fee for its role.

Because these exporters can now control when they are paid, they can more easily plan, invest, and execute business activities that grow the business. For example, with the additional capital, an MSME can purchase raw materials in higher volume, diversify its product offerings, or even invest in equipment or infrastructure that will drive greater efficiencies.

When the exporter in the Global South grows into a larger business, they have more to offer their partner importers in the United States. These benefits include everything from discounts on imported products to a greater selection to choose from. Invoice financing, in short, does not only work in the favor of the American importer: It helps the exporter grow to the point that it can offer even more value to their trading partners in the United States.

Simplify financial planning
As mentioned earlier, the terms vary wildly without an invoice financing platform. Depending on negotiations, importers may have very different payment terms with each of their suppliers. Some might be 14 days, 30 days, 60 days, 90 days, 120 days, and every number in between. This variability of payment terms is not only difficult to track (the standard terms of each importer will need to be documented somewhere), but it makes financial planning chaotic.

When payment terms have such high variability, the finance team needs to be laser-focused on accounts payable on a weekly basis, balancing the need to maintain working capital with the need to meet exporter payment terms. This function is resource-intensive, taking valuable time away from finance officers that could otherwise be spent on more valuable business activities.

Invoice financing alleviates finance teams of this burden. When payment terms are standardized to a universally set 120 days, finance teams can necessarily spend less time scrambling on accounts payable on a week-to-week basis. Their payment cycle, after all, now runs on a 4-month cadence. With the time saved and the working capital gained, finance teams can permanently take a longer-term view of their organization’s financial planning. They can focus on deploying the capital to the mid-to-long-term business activities that will grow the organization.

Choosing invoice financing as an importer in the United States
While the United States is the foremost economy for importing in the world, this economic climate presents key challenges for individual importers. As there are only so many trade-offs that importers can negotiate with their partner exporters, importers need to seek more innovative solutions in order to more successfully complete.

Invoice financing, in particular, gives importers a longer payment horizon, which strengthens their relationship with exporters, makes it easier to plan revenue-generating business activities in the medium- to long-term, and even opens the door to discounts and other benefits, as their partner exporters can also more easily grow when the platform pays them immediately. Clearly, invoice financing should be an option for importers in the United States who wish to innovate.

Embarking on any new initiative – even one as beneficial as invoice financing may be, is always daunting. To make this easier for importers, Incomlend has proudly partnered with CMA CGM, a leading shipping group that operates in 420 ports across 160 countries using 257 shipping routes. As part of this partnership, Incomlend offers special rates to any of CMA CGM’s clients. This offer is meant to make it easier for enterprises to experience first-hand the value that invoice financing can bring to their organization.

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December 9, 2022
The Key to Competitive Advantage

As the world heads toward a possible recession in 2023, one of the industries that may be disproportionately affected is the supply chain. When the gross domestic product (GDP) falls, enterprises import, export, and trade fewer goods as a result.

In this kind of economic environment, enterprises in the supply chain generally take one of two approaches to handle the shortfall. Some will institute a hiring freeze across the organization, making exceptions only for key talent that drives revenue. Others will go back to the figurative drawing board, rethinking their business strategy.

While both of these initiatives are necessary – enterprises absolutely should reevaluate their hiring policies and business plans – neither should be the end-all, be-all strategy for a recession. The key to competitive advantage during these times is decidedly less exciting, as it’s not about tightening your corporate belt through a spirit of grit and resilience or making savvy boardroom deals that keep the company afloat. The key to surviving, if not thriving, during any economic climate is simpler: working capital, which is the total difference between a company’s current assets and its current liabilities.

Business leaders in the supply chain who focus on freeing up more working capital for their enterprise can gain major competitive advantages. The operative word in that statement is “can” since working capital is not in of itself the competitive advantage, but the means to this end.

With working capital, an enterprise can invest in essential, revenue-generating resources at a time when other organizations are cutting them back. They could invest into technology that digitizes aspects of their business and creates operational efficiencies. They could invest into infrastructure that helps their business achieve greater economies of scale. They could invest in new strategic hires that can generate exponential rather than incremental growth across important business metrics. Such investments can produce a virtuous cycle, as they can create more working capital that can be further reinvested to create even more working capital, extending the competitive advantages of an enterprise over industry peers even further over time.

This surplus of working capital is ideal, but achieving it may be easier said than done. If a business leader looks to the typical line items on an accounting spreadsheet, he will get the same results as everyone else. To free up more working capital than competitors, business leaders need to look where only the most forward-thinking enterprises are: invoice financing.

Invoice financing can help both sides of the supply chain produce more working capital. The process for exporters is straightforward. An exporter ships their goods to their overseas buyer as usual, but instead of waiting up to 120 days for the export receivable to be paid, it can be paid upfront in as little as 3 days through an invoice financing platform. The export receivable will be paid up to as much as 90% of its face value (the factoring provider takes a fee for facilitating the financing), and the exporter can enjoy more working capital sooner. If the exporter uses invoice financing for multiple transactions, the business can quickly build a war chest that can be used for reinvesting into important resources. Invoice financing for exporters is thus industry agnostic, working in favour of brands in everything from garments and textiles to pharmaceuticals.

The process for importers is also straightforward and equally beneficial. Importers provide the invoice financing platform for the exports receivable that they wish to be paid earlier. The invoice financing platform then pays off this export receivable immediately with the exporter, and the importer in turn enjoys much more favourable payment terms: They have up to 120 days to pay back the full face value to the provider. This system maintains a positive business relationship with their exporter compared to late payment or non-payment while giving them more working capital to reinvest into their own business.

Invoice financing, in short, can be the best path to more working capital for both importers and exporters. With more working capital, these enterprises can focus on business activities that lead to growth rather than merely maintaining operations like most of their industry peers during times of economic crisis. Despite these advantages, enterprises may still be reluctant to try invoice financing, given how novel the solution is.

For importers and exporters interested in exploring invoice financing, Incomlend is here to help. As a top invoice financing platform – we were even recognized as one of the fifteen fastest-growing companies in Singapore in a prestigious annual ranking by The Straits Times and Statista in 2022 – we have plenty of expertise and experience to share with your enterprise. Just reach out to our team for a quick chat via the button below.

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November 22, 2022
Healthcare Import/Export: Challenges and Solutions

When it comes to healthcare import-export, there are specific facts you better be aware of.

Global supply chain disruptions during the pandemic significantly impacted the healthcare products industry. As a result, governments responded by implementing policies to help support the import and export of medical goods and services. According to the World Bank, these measures “increased average trade costs of medical goods by about 60 percent.”

These effects continue today as the landscape for the global importing and exporting of healthcare products still requires more significant measures to mitigate supply chain difficulties.

To keep up with inventory management and economic challenges, healthcare businesses, both for-profit and non-profit, like the IDA Foundation, need to understand as much as they can about the importing and exporting of medical supplies.

Medical Supplies Imported and Exported

Statistically, most of the import and export of medical equipment and medical supplies wholesale fall into one of these categories of HS codes, 9018, 9021, 9022,9019, and 4015. Instruments, appliances, and apparatus are among the most traded healthcare products globally.

What are the top imports and exports of medical supplies?

  • 1. Medical, surgical, dental, and veterinary instruments, and appliances
  • 2. Electro-medical apparatus
  • 3. Sight-testing instruments
  • 4. Parts and accessories for scintigraphic apparatus
  • 5. Orthopedic appliances
  • 6. Artificial body parts and teeth
  • 7. Hearing aids
  • 8. Crutches, belts, trusses, and splints
  • 9. Bone plates, screws, and nails
  • 10. Pacemakers
  • 11. X-ray supplies such as x-ray tubes, x-ray generators, control panels, desks, screens, and chairs
  • 12. Mechano-therapy
  • 13. Artificial respiration appliances & apparatus
  • 14. Ozone, oxygen, and aerosol therapy
  • 15. Vulcanized rubber articles of apparel & clothing accessories

Which nations rank first for importing and exporting healthcare?

According to a report from globalEDGE in 2019, imports and exports from USA healthcare companies ranked first globally. China ranks second due to global healthcare economies deciding to export medical devices to China.

Top 10 Healthcare Import Countries

  • 1. United States
  • 2. China
  • 3. Germany
  • 4. Netherlands
  • 5. Japan
  • 6. France
  • 7. Belgium
  • 8. United Kingdom
  • 9. Italy
  • 10. Canada
    • Top 10 Healthcare Export Countries

      • 1. United States
      • 2. Germany
      • 3. Netherlands
      • 4. China
      • 5. Ireland
      • 6. Switzerland
      • 7. Mexico
      • 8. Belgium
      • 9. Japan
      • 10. France

      What are the difficulties of importing and exporting healthcare products?

      Several factors have contributed to difficulties in the international trade of medical supplies and other healthcare-related products. To import and export medical devices, wholesale medical supplies, wholesale medical supplies, and other healthcare products, businesses must be able to negotiate an array of trade policies established by worldwide governments, including tariffs, import costs, and rising energy prices.

      The WTO, the World Health Organization (WHO), and the World Intellectual Property Organization (WIPO) have been working together to address difficulties associated with importing and exporting healthcare products.

      These institutions explained in a joint statement, “International trade is vital for access to medicines and other medical technologies, markedly so for smaller and less-resourced countries. Trade policy settings — such as tariffs on medicines, pharmaceutical ingredients, and medical technologies — directly affect the accessibility of such products.”

      For improvement to the international trade system to occur, countries must work in cooperation, reduce tariffs and import fees, and improve their transparency with their trade policies. In the meantime, healthcare businesses must keep current on how this confluence of international policies impacts their ability to trade worldwide.

      How to manage cash flow and supply chain requirements

      It can be challenging for businesses to manage their cash flow and meet supply chain requirements. Often the cash flow of income received by accounts receivable from customers and additional sources doesn’t align with the schedule of payments going out of the account payable to suppliers.

      Businesses need to develop a strategy for building sufficient working capital. This cash reserve can bridge the gaps between lapses in cash flow into the company.

      However, managing supply chain cash flow in today’s economic conditions can be challenging. For example, a company may not receive incoming payments if its products haven’t left the shipping container due to port congestion or delays. Unfortunately, the suppliers still expect to be paid on time.

      When it may not be enough or feasible to generate a significant cash reserve, businesses need to look to other methods to keep the cash flowing as steadily into the company as it’s going out.

      5 ways to increase cash flow to meet supply chain requirements

      There are a few ways that you can increase cash flow so that your supply chain can run smoothly. Consider these ways and which ones can benefit your processes:

      • 1. Engage in negotiations with suppliers
      • 2. Factor invoices
      • 3. Encourage customers to pay early
      • 4. Consider taking out a small business loan
      • 5. Invoice Financing

      Engage in negotiations with suppliers

      The first step in mitigating this cash flow gap starts with reaching out to your suppliers. Most suppliers will work with businesses and negotiate for extensions on your payment schedule.

      It helps to be on good terms with the suppliers before communicating your needs. Establishing trust in your ability to keep your end of the bargain can facilitate working out a deal or extending your terms.

      Factor invoices

      Factoring can help with cash flow deficiency. Use online factoring services to help make this process more efficient for your company and your customers. Onboarding is usually easy and the process is speedy.

      Encourage customers to pay early

      Provide a discount or an incentive to encourage your customers to pay early. Although not all your customers will agree to it, it’s worth the attempt. Gaining these funds ahead of schedule can give your cash flow the boost it needs.

      Consider taking out a small business loan

      Although it may seem like an extreme step, a business loan can bring in cash flow now, when you need it. However, the process of applying for a small business loan is not always straightforward as it may involve lots of KYC and compliance checks. If you think this is the best option for your business, you can create a short-term loan for only the amount you need to cover the gaps in cash flow.

      Exporters can benefit from Invoice Financing

      As an exporter selling healthcare products and medical goods, did you know you can benefit from invoice financing? When you sign up for invoice financing, you’ll have 90% of the invoice value paid immediately after you ship the goods. The outstanding 10% will be given back to suppliers once the buyer has paid back the provider. This one simple step frees funds so you can re-invest your money to pay your suppliers, compensate your employees, and finance your next production cycle. As a result, you can scale up your business faster and more efficiently. Learn more at incomlend.com.

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November 3, 2022
If you import/export goods, you should read this

These days, the global economy is more competitive than ever before. This creates a fast-paced environment where every second and dollar counts. These factors, combined with the recent economic instability all over the world, have caused many organizations to look for ways to cut costs and increase their working capital.


But what is working capital?


Simply put, it is the total difference between a company’s current assets and current liabilities. As an importer or exporter of goods, one of the best ways to achieve this is through trade finance.


The overall trade finance meaning covers all kinds of financial products that can be used to facilitate international trade. Trade finance products include trade insurance and export factoring. Export factoring follows the same basic principles as invoice factoring, except that it covers overseas transactions. If you import or export goods, this article might be interesting for you to learn about benefits that export factoring can have for your business.


Benefits For Importers

As an importer, one of your primary goals is to stabilize your supply chain. With all of the recent upheavals, this has only become a bigger challenge. According to a 2021 Statista survey, 57% of businesses cited supply chain disruptions and shortages as one of their top challenges. Furthermore, from January to November of 2021, $238 billion worth of cargo experienced “significant delays” outside the ports of Los Angeles and Long Beach. Is your organization prepared to handle delays like that? If your company already paid in full for your shipments, you could lose thousands or even millions of dollars. However, with invoice finance, this risk can be mitigated.


Instead of paying in-full at the beginning, invoice finance allows you to pay for your supplies in gradual payments, up to 120 later, thus minimizing the financial impact of delays in shipping.


Once you have made your purchase and the accounts receivable workflow has begun, this process starts with cash being sent to your international suppliers within three days post-shipment by your provider (this video explains the flow quite well and in simple terms).


You then can pay for your imports up to 120 days later. The supplier will ship the goods and issue the invoice. For international shipping, these goods will often be shipped via shipping containers on large ships.


You can then check the invoice against related documents, such as the bill of lading. This process can free up your working capital and ensures the continuity of your supply chain. Your suppliers will appreciate the infusion of immediate cash and this will strengthen your relationship with them.


That means, if you and your supplier get onboard for invoice financing, he might also consider giving you additional discounts on your items!


But there’s more: this system can also be beneficial because it can improve your competitive advantage by offering rapid payment terms to new suppliers. As you can see, financing foreign trade can be a great way to achieve more efficient working capital management.


Benefits For Exporters

Exporters sell goods to overseas buyers. Your goal is to cash in on these exports as quickly as possible and expand your working capital. Unfortunately, there are often delays that can cost your business. Research shows that 60% of invoices are paid late. Specifically, South Africa, Mexico, and Australia tend to pay around 26 days late. During the Covid Pandemic, the US and Canada paid invoices punctually just 29.1% and 54.2% of the time. It is imperative that your business have a way of weathering these kinds of storms. Nobody can predict the next pandemic, but invoice finance can be an excellent way to stay prepared.


According to the provider you choose, you will get a certain percentage of your invoice upfront. At Incomlend, for example, we fund 90% for exporters invoices immediately after the goods have been shipped. Your buyers will then pay us with extended payment terms. Finally, we will then pay you the 10% left from the amount received after deducting our fees. With invoice factoring, you never need to worry about payment collection because we handle it all for you.


Much like for importers, invoice factoring can help scale your business by liberating working capital. This money can be used to better cover your operational expenses and finance your next production cycle faster: paying suppliers, employees, and so on.


Unlock Opportunities

Do you want to know more about invoice financing? Find out if your business qualifies in a few clicks https://eligibility.incomlend.com/.


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October 21, 2022
Bangladesh exports: Apparel Sector in the Lead

Bangladesh’s exports have been growing exponentially over the last few decades.

While many may disregard this small, South Asian country, it’s home to over 165 million people that help export over $50 billion every year. While exports are growing, so is the Bangladeshi economy.

This growth opens up even more possibilities for foreign investors. Whether you want to trade locally or outsource your production, Bangladesh is the perfect place.

Interested in learning more about the Bangladeshi export market? You’re in the right place. Here’s everything you need to know about the import and export business in Bangladesh.

Bangladesh

The People’s Republic of Bangladesh may not be the most popular country in South Asia. However, with over 165 million people and a $400 billion GDP, the country is slowly becoming a dominant player in the global export market. Bangladesh has a thriving export market, with the majority of its imports being raw materials to support the export business.

Bangladesh is in close proximity to major trading partners such as India and China. This gives them the advantage to manufacture and distribute goods throughout the world. This is because Bangladesh can leverage the same logistics routes as India even though the local market is so much smaller in comparison.

This helps make the local manufacturing market a prime destination for clothing and textile brands.

Local Manufacturing Market

As the second largest economy in South Asia, Bangladesh has a strong local economy. The local GDP has been on the rise in the last decade, with estimates showing that the country is on track to hit $1 trillion in GDP (PPP) in a few years. The nominal GDP of the country is just below $400 billion, making it an incredibly competitive market in the developing world.

The Bangladeshi Government has invested billions into local infrastructure and education. This was to help revive and grow the local economy. However, the textile industry is primarily responsible for the country’s expansion. The local manufacturing market is so dominant that premium brands from around the world want to work with local companies in the area.

Import Needs

Even though Bangladesh exports tons of finished products every year, the economy is still heavily reliant on essential imports. While the deficit has reduced in recent years, Bangladesh still relies on China and India for most of its raw materials. Bangladesh’s biggest imports are energy and raw materials such as cotton, woven cotton, and knitted fabrics.

As with many other South Asian countries, Bangladesh is also reliant on the big economies of the world such as the EU and the United States.

The Bangladesh Export Business

The local manufacturing market in Bangladesh is incredibly efficient and cost-effective. This allows Bangladesh to be the perfect manufacturing hub for textiles and clothing. While Bangladesh exports over $50 billion every year, almost all of this is due to the dominant clothing and textile industry.

Clothing

Bangladesh has some of the most efficient clothing manufacturing facilities in the world. Much like China, the local manufacturing business has invested in making production as cheap as possible. Along with low labour costs, this makes Bangladesh the best place for Europe to outsource the production of its clothing.

Textiles

While the clothing industry is dominant within the Bangladesh market, the textile industry is not far behind.

This showcases the quality of production within Bangladesh. Unlike other low-cost manufacturing countries, Bangladeshi companies still produce high-quality clothing. This is what encourages premium brands to outsource their production to Bangladesh.

Bangladesh Online Exports

While Bangladesh may seem like a low-cost manufacturing hub, the factories are incredibly advanced. These companies have embraced the internet to allow people from around the world to find and place orders completely online. This helps cut down on costs while also reducing the time taken to close the sale.

Biggest Trading Partners

When it comes to international trade, the United States always takes centre stage. However, Bangladesh trades more with Europe than America. In actual fact, Bangladesh exports more goods to Germany alone than to the entire United States. This massive export business is driven almost exclusively by fast fashion brands like Zara and H&M.

Europe

While Germany does account for 16% of all Bangladeshi exports, 7.4% goes to the United Kingdom and 7.1% goes to Spain. Bangladesh also exports tons of clothing and textiles to countries such as Poland, Italy, Russia, Austria, France, Denmark, and the Netherlands.

This means that wherever you are in Europe, you can effortlessly import products from Bangladesh with ease.

Unites States

The United States accounts for only 15% of the total exports from Bangladesh. While this is still over $7 billion every year, a majority of this is in formal clothing. Over 30% of all clothing exported from Bangladesh to the United States are men’s and women’s suits.

This is closely followed by men’s shirts, sweaters, and coats.

How Invoice Financing Can Help With Bangladesh Exports

The Bangladesh export business is massive. At the same time, the entire clothing industry is so strong that companies from around the world are outsourcing to local Bangladesh garment manufacturers.

When it comes to running a successful import-export business, invoice financing can represent a great way to help your business scale. This is because factoring services allow you to cash-in 90% of your invoices upfront, while the buyer pays back the factoring provider up to 120 days later.

Incomlend is a Singapore-based fintech that can help improve your cash flow to keep your business running, specialised in invoice financing for small and medium-sized companies. If you export items overseas from Bangladesh, we can help you. Find out your eligibility in one click!

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October 14, 2022
How much is the gems and jewellery industry worth in India?

India is one of the world’s critical gems and jewellery trading growth markets.

In fact, did you know that from April to August 2022, export jewellery from India reached a total of US$16,695.56 million? According to gems and jewellery export data, this was 4.4% more than the previous year, with export values of over US$15,991.68 million.

India’s dominance lies in the country’s affordable labour prices and quality education. As a result, businesses also have easy access to highly qualified workers.

In addition, it is a sophisticated diamond cutting and polishing hub. And finally, local government regulations favour and promote the sector.

Gems and jewellery trading in India may soon be among the country’s most profitable trade sectors.

Today, the world stands at the edge of a global economic boom in gems and jewellery, and India’s poised to sit at the centre. This article provides insight into India’s expanding gem and jewellery business, including artificial jewellery export from India.

So read on!

Origins of Gems and Jewellery Trading in India

India’s traditional jewellery is beautiful and showcases the country’s cultural and aesthetic history. The Indian jewellery-making practice has been around for over 5,000 years.

India has also always been a leader in the gemstone trade, an ancient industry dominated by everyone from the Moghuls to the findings of J-B Tavernier, a French jewels merchant and traveller.

In fact, India was once the only place in the world selling gems—this early trade spanned more than 2,000 years. Merchants worldwide came to the continent to buy valuable Golconda diamonds, Kashmir sapphires, and Gulf of Mannar pearls.

And just as in the West, jewels signified the wealth, stability, and status of those in the Indian upper classes.

The Museum of Gem and Jewellery Federation was founded in 2015 in Jaipur. This “gems and jewellery in Jaipur” trading centre and museum safeguards valuable items of national and historical significance.

Evolution of the Indian Gems and Jewellery Industry

The Indian gem and jewellery trading sector is bustling and fast-growing.

India is the world’s most significant source of trained, competent, and adaptable workers, and deregulation-focused government policies encourage the proliferation of all types of businesses. As a result, the Indian gem and jewellery export industry contributes about 7% to the country’s GDP.

In 1966 the Gem & Jewellery Export Promotion Council (GJEPC) was set up for the sector of gems and jewellery in Surat. One example is, they help traders with how to export jewellery from India to the USA.

It helped (and continues to help) exporters expand their efforts to make the gem and jewellery sector a powerhouse of India’s export-driven economy. Since its inception, GJEPC has sought to make it the world’s one-stop shop for luxury goods.

A Market Overview in Brief
The global gems and jewellery sector saw periods of slow growth at the height of the pandemic. Despite this, the worldwide market size for this lucrative industry is projected to exceed US$480 billion by 2025.

Indian Gems and Jewellery in Numbers
India provides 29% of all jewellery sold around the world. The country has more than 300,000 companies selling gems and jewellery, which is predicted to grow.

Today, the Indian gem and jewellery sector has a large number of:

  • Craftsmen
  • Traders
  • Artisans

This rapid development in demand has resulted in a skilled labour shortage.

Government Support

Because gem and jewellery export from India to the USA and other countries is essential to India’s industrial production, the Indian government is dedicated to promoting the products to ever-more countries—for example, supporting jewellery export from India to Canada.

This includes:

  • Taking steps to increase investment
  • Building the skills the industry needs

These actions aim to guarantee this vital sector survives into the future.

Export growth is primarily attributable to increased import demand from the sector’s top export market: the United States. North America, the Middle East, and the Far East are the other primary export destinations for Indian gems and jewellery.

Various government programs in India are supporting industrial expansion and exports. This includes the creation of a special low-tax zone in Mumbai focused mainly on the gem sector that aims to compete with the world’s leading diamond trading hubs.

Benefits of Invoice Financing for the Indian Gem and Jewellery Industry
Indian exporters who sell to the US and EU can take advantage of invoice financing or factoring. For example, this is one way to help the gems and jewellery export to the USA from India.

This can help them in several ways:

  • Working capital can help your business grow
  • Receiving cash early cuts down on the number of days you have to wait to get paid
  • Up to 90% of the amount payable is delivered immediately after the products are sent
  • You can better cover your operating costs
  • You can obtain money for future production faster, helping you sell more
  • Keeps your business safe from debt risk

The significant advantage of receivables financing is the release of frozen cash. This helps gem and jewellery exporters better employ their capital to produce more profits.

Keep Your Gems and Jewellery Supply Chain Safe

Exports are up in 2022 mainly because import demand has picked up in the USA and EU, two of India’s biggest export markets. As a result, many Indian traders have been ready and waiting to fill orders fast.

This operation is both internal and external. It is internal because domestic players are starting to work together, and it is external because large global gems and jewellery trading companies are entering the worldwide market.

As an importer, you make purchases from suppliers in other countries. If you’re thinking about improving the payment terms on your suppliers’ invoices, which could lead to higher discounts on the goods you purchase) and ensure that your supply chain is safe, you should consider invoice financing for your suppliers.

Want to know more on how it works? Contact us at Incomlend and we’ll be happy to give you more details.

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September 21, 2022
Shipping and Importing Overseas: Top 3 Problems and How to Solve Them

Shipping and receiving products across the world can be a headache.

Global importing and exporting can be incredibly rewarding for both retailers and distributors, but there are several obstacles to overcome. Before your products even leave your warehouse, you can get lost in a minefield of paperwork that includes logistics, taxes, customs, and other challenges.

In this article, we’ll cover three of the top problems when it comes to shipping and importing overseas — and how to fix them.

Keep reading to learn more.

1. Managing Logistics and Shipping Issues

A huge challenge for global importers is dealing with logistics shipping issues. It can often feel like certain problems are completely out of control. This is why it’s important to have a sturdy infrastructure set up so that shipping can be managed from several locations around the globe.

Although they always existed, shipping problems were shoved into the spotlight during the COVID-19 pandemic in 2020. This had a detrimental effect on trade around the world. Many countries closed their borders, which stopped the movement of goods between nations.

Not only did trade slow down, but existing orders and contracts were put on hold with no end. This led to severe shortages around the world for months at a time.

When there are disruptions in the global supply chain, it can cause a chain reaction of importing problems, including:

    • Delivery delays
    • Missing paperwork
    • Spotty communication
    • Mishandled products

Solution:

On a global level, several things need to happen to prevent a supply chain disruption in the future. For one, transportation logjams need to be cleared up. These logjams are a result of many issues, like:

        • Holdups in ports
        • Container box shortages
        • Price increases in several areas

Dramatic rises in container freight rates have further complicated the situation.

Another critical issue that has led to shipping problems is recent labor shortages. This has also caused more delays, cost increases, and logistical challenges.

Both the public and private sectors need to invest in upgraded digital infrastructure that allows workers to work more efficiently. This can help them work remotely, perform tasks easier, and deal with pandemics and demographic shifts.

On a micro level, businesses can take advantage of different trade finance tools like supply chain financing. This allows importers to buy goods from overseas suppliers on credit and invoices that can be paid up to 120 days later, making the process faster and smoother for both parties.

2. Poor Communication

Communication is essential for all businesses, but dealing with other firms from around the world can be complicated — making it vital to the success of international shippers and importers.

Without it, it can lead to losses in profits and disgruntled customers.

Communication issues can stem from various issues, including:

        • Not being on the same page as international partners
        • Secure communication issues
        • Lack of transparency
        • Different time zones
        • Different communication tools
        • Language barriers

To successfully move products around the world at a profit, these issues need to be taken seriously.

Solution:

The first step to having strong communication is to make sure that your business is fully aligned with all of your international partners. If even a single link in the chain isn’t on the same page, it can lead to products arriving late to the market.

Make sure to regularly communicate with everyone from procurement to suppliers to other logistical partners.

When it comes to transmitting sensitive information, make sure that your in-house and international software has high data security. This means it should have a 256-bit TLS data encryption. Other important security tools include:

        • Frequent security audits
        • Updated firewalls
        • Up-to-date certificates

Lastly, allowing your communication to be as transparent as possible will streamline your business’s communication. Allow your frontline employees to have access to data so that no bottlenecks are created.

This will eventually have a positive effect on your entire supply chain, leading to higher profits.

3. Delayed Payments By Buyers

Another export issue comes from buyers that don’t respect invoice maturity terms and delay payments. As the supply chain crisis continues to grow after the pandemic, many suppliers are being forced into longer payment terms from buyers.

This happens because both sides of the transaction are desperate to protect their money. The pandemic had a huge effect on cash flow all around the world.

Buyers start to use delayed payments as a strategy to get more leverage on suppliers. Although some places in the world are adding new regulatory requirements to combat this, it’s a problem that’s happening all over the world.

In the worst-case scenarios, some won’t pay suppliers at all. This could be a result of defective goods or any other part of the order not meeting the requirements of the buyer.

Solution:

A great solution to this problem is the use of invoice factoring. With invoice factoring, sellers can ship their goods and issue an invoice through a third party.

This allows the exporter to receive funds that the buyer owes ahead of schedule. They can get up to 90% of the invoice, even before it has been paid. The receiver, on the other hand, has up to 120 days to pay the full invoice.

By using a trusted third party to facilitate the trade, both sides are protected. Exporters can grow their businesses quickly by freeing up working capital and receiving money that they are owed quickly. In this way, money can be re-invested to pay the suppliers, employees, to finance the next production cycle or something else.

Get in Front of Any Problems Shipping and Importing Overseas
Those are among the top problems when it comes to shipping and importing overseas. By creating a strong foundation for your business and preparing ahead, you can get in front of these issues before they hurt you down the line.

If you deal with international shipping and are ready to take advantage of trade finance tools that can free up your working capital and ensure continuity in your supply chain, make sure to reach out to us today!

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September 9, 2022
Leading Factors Influencing Growth of Trade Finance

In 2020, the global trade financing market was valued at $44,098 millions but by 2030, it’s projected to hit $90,212!

International Trade financing continues to grow at an alarming pace worldwide but most people don’t really know what it is. The truth is that trade finance is the lifeblood of almost all business transactions that cross borders. It’s important to know about because it creates opportunities for everyone around the world to distribute their products.

In this article, we’ll tell you everything you need to know about trade finance and the main factors causing it to grow so quickly. Keep reading to learn more.

What Is Trade Finance and How Does It Work?

Trade finance refers to the different financial tools used by companies around the world to help trade and commerce. It helps create a smoother trading process for both importers and exporters in different trade industries.

The main function of trade finance is to bring in a third party for trade transactions. By doing this, they can remove risk from either of the two main parties to facilitate the transaction easier in the short term.

For example, they can provide an exporter with payment with in-transit finance. At the same time, it allows the importer to get an extended line of credit to fill the order.

Different parties that can be involved in trade finance include:

  • Banks
  • Insurers
  • Business to business importers with goods receivables
  • Business to business exporters with goods shipping
  • Trade finance companies
  • Export credit agencies

Although it may seem similar to conventional financing, trade finance has some key differences. It can protect against international trade’s unique risks, like:

  • Currency fluctuations
  • Political instability
  • Non-payment issues
  • The creditworthiness of any of the parties involved

By using tools like lines of credit and insurance, the risk is lowered for all parties and gets products moving around the world. It can also improve cash flow for companies and improve the efficiency of their operations. By giving small businesses working capital, everyone involved benefits.

What Is an Example of Trade Finance at Work?

Let’s imagine a Thai entrepreneur. He wants to export his hand-crafted textiles to other neighbouring countries.

Depending on his time in business, he would need financing and working capital solutions to get his business off the ground.

However, local banks are most likely unable to provide financing for different reasons. His credit scores might cause some roadblocks as well. And if they can, it’s probably at a really high cost. The application process might take too long, too.

Another barrier he would run into is outdated regulation, which might block him from doing useful actions. An example of this would be getting cash in advance of delivering the product.

The most glaring issue is that big corporations can afford to do most of these things easily but smaller businesses cannot.

With trade finance, all of the issues that lie between importers and exporters can be bridged. This can lower the amount of time it takes for products and payments to reach the parties, even in complex situations.

Trade finance can be used to help small businesses with cash flow management without disrupting their supply chain. They can sidestep obstacles that might have hindered them from trading internationally before.

By facilitating timely payments, trust is built between the parties. This allows global trade relationships to grow.

Leading Growth Factors of Trade Finance
Trade finance is experiencing a huge period of growth and is showing no signs of slowing down. Let’s take a look at some of the leading factors in its growth.


Rapid Change in Technology

Over the past few years, the world has seen exponentially fast improvements in technology. This has led to better communication, mobility, and global connectivity.

Every improvement in tech has led to cascading effects, allowing companies to come up with more innovative products and better process technology. This has made the world “smaller” and more available to work together, which has allowed companies to move abroad with ease.

Increase in Competition

As competition continues to grow naturally across the world, companies prefer to seek out intermediate goods and raw materials from countries that offer the lowest costs.

Small business owners continue to set up units in different countries, which lowers financial risk and the cost of operation. This increasingly popular idea allows internationalisation to happen at a faster pace.

Trade Liberalisation
An important driver of trade finance is the continued liberalisation of barriers to trade in both goods and services between countries. As governments continue to allow wider market access to other countries, other governments typically reciprocate the decision by allowing wider market access to both countries.

COVID-19 Pandemic

The coronavirus pandemic triggered huge changes in global trade. Although it initially created huge disruptions in supply chains and manufacturing output, this led to a higher need for trade credit to recover from the crisis.

Huge financial gaps appeared all over the world from the pandemic, which hampered global recovery and affected small businesses dramatically. This caused a skyrocketing need for trade finance to help support international transactions to return the global economy to its previous levels.

Globally Connecting the World Through Financing

That’s everything you need to know about trade finance and the factors pushing its growth. With trade financing, small businesses to large corporations can move their wares internationally with smooth transactions.

If your business needs solutions for invoice financing, don’t hesitate to reach out to us today!

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June 7, 2022
How Do We Identify Corporate Misconduct?

In its latest Enforcement Report, The Monetary Authority of Singapore (MAS) shows that a robust system of checks and balances is crucial for corporate governance in companies. The report shows instances in the corporate world where a poorly managed situation turned worse and eventually led to the collapse of companies. One example is a global payments processor. The CEO and two senior managers were accused of financial fraud, with about S$2.8 billion missing cash in their accounts years ago.

Author’s Bio:

Selvaraj Nadarajah is the Group Compliance Manager and Money-Laundering Risk Officer (MLRO) for Incomlend Group.

In Singapore, MAS is investigating some companies for potential breaches of financial industry laws and regulations, ranging from suspected disclosure-related issues and non-compliance with accounting standards.

What are the issues surrounding financial mismanagement at companies, what constitutes fraud, and the impact on stakeholders?

Who tends to commit corporate fraud?

Corporate fraud refers to deceptive or illegal activities that an individual or a company commits, including breach of directors’ duties, petty theft, misappropriation of funds or falsifying financial statements.

Anyone can commit fraud at any time. It can be a CEO, a third-party vendor, a customer or partner, or even a junior employee in the company. Everyone in the company, from the board of directors, founder, CEO and significant shareholders, play a crucial role in setting the corporate culture. If a senior employee has been negligent in their duties, it creates opportunities for errant behaviour to take root. It’s essential to have independent directors on the board who will provide oversight of management practices.

In Singapore, an individual or a company who commits serious fraud could be fined or even jailed. Some companies have also closed down due to severe fraud. One example is the 1Malaysia Development Berhad (1MDB) scandal. Some banks had their licences revoked in Singapore for their involvement in the alleged looting of billions of dollars from Malaysia’s sovereign wealth fund came under investigation in 2015.

Signs that a company may run into governance problems

An example of corporate failure due to bad governance practices is a local social media company investigated in 2018 for possible breaches of the Securities and Futures Act. The police investigation has not yet concluded.

Early signs of distress or tension can be detected when critical management team members resign for personal reasons. The sudden departure of independent directors, audit committee chairs or senior finance employees is a typical red flag. Poor economic performance is another red flag, especially if the company consistently performs poorly compared with its peers. It should trigger the company management to ask if they are losing money to fraud.

Another common warning sign is when a company files a late reporting of financial results, when material information is announced late or when lapses occur.

Whistle-blowers are another source of information about corporate wrongdoing.

Costs of corporate misconduct

There is a cost to corporate misconduct. It comes in both monetary and non-monetary costs. And often, at a high price. Especially when the organisation loses its reputation, which could affect its business prospects in the future. Or the company could even shut down.

Serious fraud could have a widespread impact beyond the company, such as an oil trade company collapse in 2020 after a crash in oil prices exposed years of hidden losses and alleged fraud by its founder. It was revealed that the company had hidden years of losses. The oil trader was wound up after it failed to restructure US$4 billion worth of debts. The bank loans amounted to a total of US$2.77 billion to the collapsed oil trader.

For more information, contact our Incomlend team at info@incomlend.com.

 

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February 18, 2022
Keeping SafeFlex Business Momentum Going with Incomlend Invoice Financing Programme

As economies reopen worldwide, we can expect an increase in global business trade activities in the days ahead.

 

Jitesh Agrawal, CEO and President, SafeFlex International Limited

Author’s Bio:

 

Jitesh Agrawal, CEO and President, SafeFlex International Limited

 

Jitesh Agrawal is a textile engineer from one of the world’s premier institutes. He has been in the polymer processing field since 1984 and has concentrated on poly-woven and poly-knitted products. He is the driving force behind developments and manufacturing facilities with an in-depth knowledge of product usage and needs.

 

According to a study by Market Research Future, the global bulk bags market is projected to grow at a 6.80% CAGR to hit a valuation of around US$5 billion by 2023. India is one of the world’s most enormous Flexible Intermediate Bulk Containers (FIBC) and bulk bags suppliers. The growing appetite for these products and the revitalisation of global trade present an opportunity for SMEs like us to capture new revenue streams.

 

SafeFlex International Limited is a leading India-based manufacturer of Flexible Intermediate Bulk Containers, poly-wovens and poly-knits, with four manufacturing plants. We have a portfolio of over 500 global buyers comprising long-time clients who are distributors and manufacturers spreading over the US, UK, and Europe.

 

SafeFlex has experienced significant revenue growth throughout the years, and we want to keep our business momentum going. To keep up with the competition and meet rising demands from our buyers, we are expanding our production capacity. However, it can typically take us up to 90 days to cash in an invoice. It can hinder our financial agility, manufacturing capacity, and expansion ability.

 

With our new partnership with Incomlend, we no longer face extended credit terms as we can now cash in an invoice as early as three days after our bulk bags and FIBCs are shipped to buyers. With the Incomlend Invoice Financing Programme, we’ll now have the working capital and means to double our manufacturing output. It allows us to take advantage of the thriving market and grow our revenue.

 

SafeFlex is excited to form this long-term partnership with Incomlend. Its Invoice Financing Programme provides us with a quick turnaround solution that will place our company in a stronger position for growth as economies start to recover and the demand for our products continues to surge.

 

If you are interested in finding out more about Incomlend Invoice Financing Program, contact info@incomlend.com.

 

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