A new breed of bank employing the latest tech promises to unlock trade finance for UK SMEs “within minutes”.

Neotrade, a Manchester-based trade finance bank focused on servicing small and medium-sized enterprises (SME), opened its doors in June.

The firm’s aim is to help plug the trade finance gap experienced by many smaller exporters and importers when dealing with traditional lenders and legacy institutions, which often results in them being unfairly excluded from the credit they need to expand or stay liquid.

“SMEs form the backbone of global trade,” Neotrade says. 

“At the same time, many SMEs are struggling to get the financing they need, as banks are not able to process most of the requests; over 40% of requests get rejected automatically.” 

This occurs despite figures showing that SMEs make up almost 50% of the total volume of goods and services traded worldwide.

Neotrade sees it as its mission to serve this untapped market and help “shape the trade finance market for SMEs in the future and cover the market gap”.

As agile businesses, SMEs also require easier, faster, and more transparent ways to access financing on the go.

By employing the latest technology, including AI-based algorithms and a simple four-step online application process designed to give answers to credit applications in minutes, Neotrade hopes to make it easier for SMEs take care of things like supplier payments. 

Customers can then repay at a later date based on their chosen terms of payment.

Neotrade appears to have picked their moment well. 

Earlier this month, the UK government’s Department of International Trade announced a number of partnerships with the private sector in a bid to ‘broaden, deepen, and sharpen’ efforts to promote trade with the UK post-Brexit and stimulate the UK economy.

Much like the UK government, Neotrade believes that “international trade is a key driver for development around the globe” and that in order to do that, “businesses must have access to a steady cash flow all year round.”

Faced with challenges like post-pandemic supply chain disruption, inflation and the current volatility affecting the currency markets, many of these companies require access to additional lines of credit in order to maintain liquidity, which is where companies like Neotrade believe they come in. 

“In the face of the unforeseen, the conventional norm is to watch, wait and lie low,” the bank says. 

“We want to help businesses stay safe while moving ahead of all disruptions.”

First published by Fintech Futures.