Having an international clientele can spell the difference between success and failure in today’s global market. This is particularly true for small and medium-sized businesses, also known as SMEs, since they are the engine of the world economy. Most scientific breakthroughs and business transformations are driven by them. SMEs even developed the vaccination programme to fight COVID-19.
However, most SMEs are underserved and have limited access to trustworthy trade financing, which presents challenges to creating a robust global trading system. According to a report from the Asian Development Bank, SMEs are disproportionately affected by the $1.7 trillion trade finance gap, which is the difference between the number of applications to finance enterprises’ participation in international operations and the number of approvals.
Everyone agrees that COVID-19-related disruptions have made this shortfall worse and that it will persist unless measures are taken. Private banks have been rather sluggish in updating their decades-old trade financing procedures in light of the growing digitization of financial and commercial services. While multinational corporations, or MNCs, are leveraging innovation to redefine supply chain efficiency and transparency, SMEs, due to their small scale, find it difficult to capitalize on such opportunities.
SMEs play a significant role in international trade, so the situation needs to be remedied. This is where Tradewind Finance comes in—a global leader with years of experience and promising services that enable companies to prosper through international trade.
HELPING BUSINESSES GROW AND THRIVE
Tradewind was founded to assist various market segments and sectors in obtaining cross-border trade finance solutions. The firm finances manufacturers, wholesalers, traders, branded companies, distributors, importers and exporters, and other businesses. In particular, it serves clients who have the potential for rapid growth but are constrained, under stress, or financially impaired when it comes to international sales or who lack tangible assets but have sizable purchase orders. The firm can meet the varied needs of its clients because of its flexibility and capacity for customization.
One excellent offering is the firm’s Non-Recourse Export Factoring solution, a trade credit-insured method of receivables financing that is one of its exclusive offerings to suppliers, manufacturers and companies selling internationally. The buyer’s financial stability and creditworthiness are considered as opposed to the banks’ dual recourse options– mandating that debt be repaid in case of default – which expose both the client and the client’s buyer. This results in a win-win situation for both parties and allows firms to raise sales by offering customers extended credit terms.
Tradewind also provides clients with the margin and liquidity required to manage other pressing obligations via supply chain solutions that enable them to extend Days Payable without adversely affecting their financial position. The firm serves a variety of industries, including automotive, gaming, media, electronics, industrial & mechanical, food & beverage, seafood, apparel & textiles, and more.
While its practices and products vary by location, they always make sure to fulfill client needs. For instance, while providing export factoring services for major South Asian export centers, it offers supply chain solutions for markets exclusive to large corporations. Its ability to finance sales made on Open Accounts (O/A), Letters of Credit (L/C), and Cash against Documents (CAD) is made possible by its industrial exclusivity. The firm has a strategic presence in various markets but prefers working in emerging markets that serve developed economies.
EXPANDING ACCESS TO GLOBAL TRADE FINANCE
The ecosystem of global trade finance is made up of a variety of players. The buyers and sellers who make up this system’s core are primarily SMEs. 95% of all enterprises worldwide and more than 50% of all jobs are classified as SMEs or SME-related employment, respectively. They contribute up to 40% of the national income (GDP) in emerging economies. These indicators show vibrant SMEs are necessary for a robust trading ecosystem.
However, the current market has made it difficult for everyone to get liquidity. And with private banks, the situation is far worse. With stricter and more complex lending procedures, SMEs face challenges to establishing substantive success. Trade financing firms, however, are more adaptable and can provide SMEs with custom credit options, as well as cash-at-bank, without related debt. Tradewind has been persistent in supporting the rapid growth of firms and has solved liquidity challenges for the last 20 years.
The firm has a wealth of experience dating back to the early days of factoring Turkish textile exports to Europe and the expansion of its global business 10 years ago, including opening offices in Shanghai, Pakistan, and Bangladesh. The firm has created several high-end trade finance partnerships across South Asia, including Hong Kong, over the years. “We financed $70 million to clients in Hong Kong last year, and we estimate it to increase more than $100 million this year,” says Peter Maerevoet, CFO and regional CEO of Asia, Tradewind Global.
The trade finance sector is expected to increase to $1 trillion by 2030, and Tradewind is contributing to that expansion as well. The firm is close to financing $2 billion so far this year and is dedicated to boosting global trade. Its tailor-made solutions have helped export businesses fulfill their financial obligations. With the help of its working capital injection services, companies have quickly seen considerable and sustainable business growth. The company’s team of trade finance experts gathers detailed data about and evaluates each client’s industry to provide solutions that are specifically tailored to address their unique challenges while fostering the expansion of their business and market.
SUPPORT FOR THE GLOBAL SUPPLY CHAIN
While being a forerunner in export financing, Tradewind also excels in Supply Chain Finance (SCF). It offers financial and risk mitigation strategies to optimize the management of working capital and liquidity in the supply chain. This includes import financing, inventory financing, and vendor financing. The firm has customized financing programs that bridge financial gaps across the supply chain due to credit-based payment terms.
Eventually, clients’ cash flow is accelerated with immediate liquidity, aiding in timely vendor payments and expanding capacity to on-board additional business orders. Instead of waiting up to 3 to 4 months with doubts, funds are received within 48 hours after invoice submission. “Our products are designed to give businesses instant liquidity. This minimizes the time that is required to realize and receive payments from their foreign buyers,” explains Mr. Maerevoet.
The flexibility and tailoring have significantly helped in resolving the adversities of COVID-19 throughout the global supply chain. With regard to its clients and businesses looking for cash flow assistance, Tradewind has been more lenient in financing extended payments between buyers and sellers.
Since the firm’s focus is mostly on tangible assets, it encourages suppliers and retailers to work together compassionately rather than take sudden, harsh action that could ultimately disrupt their business. Tradewind’s global presence keeps it in close contact with both sides of a trade transaction. Clients can also receive local on-the-ground assistance in negotiations and collections as needed.
REVIVING THE UAE TRADE MARKET
Tradewind played an important role in the recovery of GCC nations from the pandemic, especially UAE. The country attracts robust capital flows from around the region thanks to government incentives for investors and the country’s continued commitment to technical and innovation breakthroughs. The pandemic affected the region significantly, upsetting its economic environment across Food & Beverage, renewable energy, Information and Communications Technology, healthcare, and real estate, to name a few sectors.
To revive the Gulf’s most liberal and resilient trading regime, Tradewind thoroughly examined the demographics and crises to create solutions that address the challenges and speed its growth. This was essential to drive purpose-led growth by navigating and predicting high-risk scenarios that could cause more disruptions and liquidity
The decision to open up markets to trade and eliminate severe lockdowns and travel restrictions created the road for alternate financing sources to enter. Tradewind’s primary focus was the SME ecosystem, and it strived to lower the risks tied to global trade and balance the needs of exporters and importers.
To help both parties benefit and support the hub of international trade, the firm offered domestic factoring in the UAE, export factoring, and supply chain financing services. In a time of extraordinary stress on supply chains, this helped to free up working capital and boost sales expansion for both potential and existing clients, which reduced liquidity issues.
By rightly balancing technology and tailor-made solutions, Tradewind is able to address the unique needs of its clients while promising efficiency in the process. Tradewind takes pride in its Client Access Portal, which offers clients a clear view of submitted invoices, payment due dates for buyers, released payments, and a unified overview to continuously track business performance and progress.
THRIVING BEYOND COVID-19
Tradewind has made proven progress in assisting the global trade ecosystem to recover. In doing so, it has helped clients realize the benefits of alternative financing solutions. The “Black Swan Event” has shown banks scaling back and pulling back their financing lines. This led to clients resorting to alternative solutions and shifting from traditional lenders. This led to companies filing for administration and suppliers seeking to safeguard themselves from protracted defaults using non recourse funding and asset-light companies seeking collateral-free export financing solutions.
As a recognized leader in its industry, Tradewind had a surge in business inquiries and interactions. Initially, it offered credit facilities, but as the clientele expanded, it also scaled up its offerings. In the end, it was successful in filling numerous cash shortfalls brought on by supply chain delays. In addition, the firm is actively working to assist industries in managing the pressures in cross-trade. Mr. Maerevoet explains,
“Due to the extreme imbalance caused by pressures in cross-trade functions, a sizable portion of the sector lacks access to customized trade-financing tools and is unaware of their eligibility for the same. We are planning to inform them about this and provide the resources they need to grow and cope with disruptions”
PETER MAEREVOET LEADS WITH BIG BRAND EXPERIENCE
One of Tradewind’s growth drivers is Mr. Maerevoet, who has transformed the company into a strong, global player, well-connected to international brands and companies and a force to be reckoned with in the face of industrial rivalry.
He supervises the firm’s global finance team with an extensive background in international trade sourcing and supply chain financing operations from his previous positions at P&G in Belgium and Levi Strauss in the US. His leadership is based on the values of envisioning, enabling, and energizing, which drive Tradewind employees in their everyday work. Being raised at P&G, he learned from great mentors who took these 3 E’s by heart.
He believes in preparing the right vision, trusting and ensuring that the team can achieve the vision, and energizing them to achieve it. In comparison to competing entities like large banks, FinTech firms, and other global trade finance enterprises, this thought process has given the firm a competitive edge, especially in handling complex cases, and a reputation for providing quality service.
The firm offers better visibility and has more operational experience than its competitors, which makes it preferred. The firm also invests in its employees’ development. The firm currently has a global workforce of over 200 people and expects to add 20 people by the end of this year. As per the CEO, this will help in identifying new clients while strengthening relationships with existing ones.
MAKING A DIFFERENCE FOR SMEs, NOW AND IN THE FUTURE
Tradewind is a symbol of financial support, standing tall despite uncertain events and disruptions. With persistence and conviction, it has established a presence in 14 countries across 4 continents. Over the past 22 years, the firm has carved a unique niche in providing liquidity to global companies with customized cash flow solutions.
One of its biggest strengths is its global reach, and the company is proud of its multicultural team of international trade and cash-flow management specialists for maintaining it. Its effective management structure across geographies and constantly updated market insights keep it at the forefront of market challenges and demands. It also helps in balancing out an equal value proposition across locations.
The company is eyeing opportunities for product development and geographic expansion. Mr. Maerevoet adds, “We are looking into new markets where we can make a difference for regional SMEs.” It literally saved companies from bankruptcy and allowed others to grow exponentially. And it intends to pursue and succeed in this purpose in the years to come.