South Africa’s FinTech Payabill has launched a product it says eliminates the risk of paying bills from international suppliers for small and medium-sized enterprises (SMEs).
“Small businesses have high credit risk and it is expensive to assess their eligibility for financing, so they have been overlooked by traditional lenders,” Payabill CEO Eli Michal told the Engineering News website Monday 27th. September. âPlus, banks and other specialty businesses typically have onerous credit requirements that few small businesses can meet. International finance is a complicated niche that requires knowledge of regulation, compliance, and forex. Our offer is 100% digital, fast and compliant.
Michal says his company’s offering, which was created in partnership with the Sasfin Forex division, allows clients to choose when and how often they want to make payments to avoid unnecessary pressure on their businesses. Payabill allows businesses to settle with international suppliers and arrive at appropriate terms for up to 90 days, while also accepting pro forma invoices for automatic settlements.
According to Michal, online credit decisions are made in a minute, with straightforward eligibility criteria. âSMEs eligible for this type of financing have been around for more than a year, are registered as CCs or Ptys and have an annual turnover of between R500,000 and R30 million. International suppliers are settled from as low as R5,000.
The company says this type of financing is particularly useful for small businesses looking to rebuild themselves following the recent riots in South Africa. To date, Payabill claims to have helped around 500 businesses with different types of trade finance.
Read more: Integrated trade credit moves away from the BNPL path
PYMNTS looked into the world of trade finance earlier this year in an interview with Behalf CEO Rob Rosenblatt, who said that type of buy now, pay later (BNPL) way of doing business In the end, shouldn’t look like the popular BNPL programs in the retail world.
âPurchase financing is fundamentally different,â he said. âWe’re usually talking about much larger transaction sizes and the underwriting requirements are much more complex. Just taking the customer’s personal FICO score and checking a few metrics is really not going to do the trick. “