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Industry roundup: 30 November

Deutsche Bank forecasts rebound in trade finance volumes 

Deutsche Bank sees global trade finance volumes rebounding by more than 7% in 2021. Daniel Schmand, Deutsche Bank’s head of Trade Finance and Lending, forecasts that trade finance will be one of the winners in a post-Covid-19 environment: 

“The World Trade Organization has forecast a 9.2% decline in the volume of world merchandise trade for this year, but it considers a rebound by more than 7% to be more than likely next year,” Schmand said. “Since the news that a Covid-19 vaccine might be broadly available in the new year, our global trade finance outlook has improved. We expect trade finance activity to return to pre-crisis levels around the middle of next year. Given the broad correlation of global trade and GDP growth, this is very encouraging.”

During the COVID-19 crisis, Deutsche Bank has been working with the German government and KfW Bank to roll out a range of loans and guarantees to support businesses affected by the pandemic.  


More UK businesses likely to apply for government-backed loans 

Demand for the UK government-backed CBILS loans is set to soar as Bounce Back Loans dwindle and cash flow dries up, according to the latest MarketFinance business insights. Of the businesses that applied for a Bounce Back loan (up to £50k) during the summer, they now have only £3,150 remaining and estimate that will see them through to the end of this week. 

Since the announcement of the second national lockdown measures, a staggering 84% of businesses will be applying for CBILS loans. They indicated this would be used to protect them over prolonged lockdown measures and in anticipation of more bills, taxes or duties to pay. In addition to this, more businesses know they can refinance their Bounce Back Loan with a CBILS loan - up from 68% two months ago to 83% today.

Shockingly, two in five businesses (42%) are still waiting to be paid for work completed since the first lockdown. In June 2020 they were, on average, waiting for £148,917 which came down to £33,906 in September, but there is still £27,134 outstanding to them. One in five (20%) reported their payments terms from customers have been renegotiated to 3 months or more. Businesses in Wales and those in the leisure, marketing and telecoms sectors have been the hardest hit, in terms of longer waiting times to be paid.

As businesses get paid later, half (49%) are withholding payments to suppliers fearing cashflow worries and future economic shocks. Meanwhile, a third (35%) reported they are intentionally stockpiling cash reserves to safeguard their companies over the winter trading period.


SumUp and Mastercard enable vehicle payment solutions for European small businesses

SumUp and Mastercard have announced new payment services tailored for Ford commercial vehicles in Germany, France, Italy, Spain and the United Kingdom. With this solution, small business owners that typically use commercial vehicles - including food trucks, beverage suppliers, mobile florists and other tradespeople - can accept card payments directly from their vehicles.

One of the main advantages of this solution is that it gives entrepreneurs the ability to accept payments from their customers immediately, rather than waiting for an invoice to be paid at a later date. This in turn can help them manage their cash flow more optimally, particularly in cases when they need to receive a deposit to buy the materials to start the job or pay their subcontractors.

Another benefit is that it gives these small businesses more choice by enabling them to accept card payments - including contactless - as opposed to cash only. Similarly, customers can have the option to pay by debit or credit card – either contactless or by chip and pin. Providing more payment choices is particularly important at a time when customers and businesses alike opt for rapid, safe and hygienic solutions such as contactless payments.

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