Fintech MODIFI Survey Reveals that Most Exporters Have Challenges with Cashflow, Unable to Easily Acquire Financing

About 84% of exporters know about invoice factoring as it’s “one of the most common facilities offered by a trade finance company,” according to an update shared with CI.

When exporters think about financing their business, “the two most common terms that come to mind are business loan (38%) and commercial loan (19%).”

MODIFI,  a global Fintech company that enables global commerce through a platform for business payments and trade management software, has reportedly “surveyed 100 exporters in America with annual revenues of more than $2 million USD to get insights on their cash flow challenges, payment term usage with their foreign buyers, and an understanding of financing and credit insurance options.”

Some key findings from the survey “showed that most exporters have challenges with their cash flow,” but cannot get the financing they need for three main reasons:

  • Financing is too expensive (40%)
  • Don’t want to pledge additional capital (35%)
  • Funding source didn’t allow for Foreign A/R (34%)

As covered last year, MODIFI had announced $145 million in debt financing with existing bank partners Silicon Valley Bank and Solarisbank.

The proceeds will be channeled towards addressing rising demand and help more SMEs with trading internationally on MODIFI’s digital platform.

The COVID-19 outbreak has “negatively impacted SME exporters and importers, with the trade finance gap widening to 1.7 trillion USD, 15% higher than 2 years ago.”

The update also noted that as global trade is booming and consumer demand is on the rise, they are “unable to capitalize on new opportunities and navigate through supply chain disruptions.”

CEO and Co-Founder Nelson Holzner stated last year:

“2021 has been a challenging year for SMEs, who had to cope with logistics issues and skyrocketing freight rates amid a strong rebound in consumer demand. We were able to step in and help our clients get additional liquidity and risk protection, thus enabling them to fulfil extra orders and grow their business. We are excited to continue our partnership with Silicon Valley Bank and Solarisbank and are honored by their commitment to our mission.”

Increase in the facility amount should help address increasing demand for the MODIFI products in the firm’s markets worldwide.

As reported in December of last year, MODIFI claimed it had quadrupled its business YoY with India “remaining the largest single market, and Greater China, UAE and Germany actively picking up pace. 2021 started off with MODIFI’s launch in the Netherlands, the US and Bangladesh.”

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