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Asset based financing is booming for all types and sizes of corporates

2017 was a good year for the asset based finance sector. According to figures released by UK Finance, the third quarter of 2017 saw a 13% year-on-year jump in invoice finance in the UK and now stands at just over £22bn, the highest ever recorded, and many new services became available.

UK booming but Brexit could impact

GTR reports that: UK Finance notes that the “exporting picture is particularly strong”, with sales from clients through export invoice discounting facilities up 33% in the first nine months of the year, and export factoring up 11%. Indeed Matthew Davies, director of invoice finance and asset-based lending at UK Finance, commented that, ““There is increasing understanding amongst businesses of all sizes of how invoice finance and asset-based lending can support them as they grow, and it is particularly encouraging that a substantial proportion of the sustained increases in lending we’ve seen in recent months is helping boost UK exports.”

But the level of invoice financing is closely linked to the health of the economy according to Equiniti, e.g. in Q1 2016, when GDP grew by only 0.16%, the balance of invoice finance consequently decreased by over 3%. Brexit could have a similar impact.

PRIMADOLLAR - deferred payment without the LC

PrimaDollar uses a new business model to tackle the invoice financing business by enabling factories in emerging countries to raise working capital. PrimDollar:

  • Takes no risk on factories or goods as their finance is always backed up indemnity from a customer of the factory, usually a mid-cap or a large-cap based on a developed country
  • Always uses third-party credit mitigation memory on every credit risk they take.

How corporates work with PRIMADOLLAR

  1. Get a limit from us on your buyer
  2. Agree your purchase order in the usual way
  3. Tell us what you need:
    • when do we pay you?
    • when will your buyer pay us?
    • do you need a letter of credit?
  4. Make the goods
  5. Get paid by PrimaDollar

To calculate the PRIMADOLLAR charge for your trade, see here.

See excellentone one minute video on the PrimaDollar concept here.​

New service: ModulTrade - the freedom to trade for SMEs 

ModulTrade uses block chain technology to address the needs of micro, small and medium enterprises by eliminating the traditional barriers for entry in the global trade:

  • Lack of trust between parties
  • High entry costs
  • Complexity of trade related operations.

The ModulTrade solution connects small enterprises to global trade via four main components:

  • Blockchain based Smart-contract platform
  • Trade related services platform
  • Trade & Reputation Network
  • Marketplaces.

Currently ModulTrade are selling tokens in their new blockchain-based global trade platform for micro, small and medium enterprises to generate funding for the platform. 

As the roadmap shows they plan to launch their product in 2018:

Source & Copyright©2018 - ModulTrade


CTMfile take: Invoice financing/trade finance is probably the most innovative area of B2B e-commerce today. These examples shows where asset based finance is heading.


This item appears in the following sections:
Trade & FSC Management
Trade Finance
Factoring
Financing Short-Medium Term Deficits
Invoice Discounting & Securitization

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