Small and Mid-Size Companies Are Being Empowered to Trade Internationally – but Success Needs Financing

By Salvador Garcia Andres, Chief Executive Officer of Ebury, the fast-growing financial services company that helps small and mid-sized businesses trade and grow internationally

In the past, international business was the preserve of large companies – but not anymore. At Ebury, we provide financial services to help small and medium-sized companies trade internationally and see the change first-hand. It is a flourishing area of business.

The internet and globalization have helped companies overcome national boundaries, and made markets more transparent. Importers can more easily identify and use foreign suppliers. Companies that would never have considered exporting in the past now find that it’s viable and attractive. They can market their services online to people across the world.

In some cases, opportunities overseas have simply been put in reach. In other cases, companies realise that they must now operate across national boundaries to thrive and compete with foreign rivals, which may be targeting their home market. Research last year by Oxford Economics for SAP, the software company, highlighted this trend. It surveyed more than 2,000 small and medium-sized companies in 21 countries, and found that only a quarter generated no revenue outside their home country. This figure was expected to drop to just 17% within three years.

Salvador Garcia Andres, Chief Executive Officer of Ebury

The research also found that 15% of companies did business in six or more countries, with this figure expected to more than double to 35% within three years. These are striking figures, and show how entrepreneurs and the CEOs of mid-market companies are developing their businesses.

However, small and mid-size companies still face challenges when trading internationally. At Ebury, we initially started by helping companies manage their foreign exchange exposure, but the trends outlined above have led us to offer more comprehensive services that empower clients, and help them overcome obstacles.

For example, if currencies move in the time between an order for goods being placed and payment being made, a transaction can turn unprofitable. At Ebury, we offer currency hedging to help reduce such risks. Our team is used to helping small and medium-sized companies deal with these issues, and often have creative solutions.

Recently, we were hearing from clients that their success was being constrained by their ability to access finance. In some cases, companies faced increases in customer orders but were struggling to finance the purchase of new supplies needed to meet demand. This was particularly evident in industry sectors that experience demand surges during winter holidays or the summer. Examples of such industries include fashion, garden furniture and luxury gifts.

What these situations had in common was that high-quality, well-managed companies were winning business, but lacked short-term financing to execute it. Clients found that banks were not as forthcoming or as responsive as they hoped.

This led us to introduce our latest innovative service, Trade Finance. It is designed to fill the gap, offering a credit line for up to 120 days to purchase stock worth up to £1 million, and is priced very competitively. There are no set-up costs, and no need for guarantees. The product was designed to work well with existing lines of finance, including those from banks.

It can also bring other advantages. The combination of Trade Finance with Ebury’s currency services allows our customers to pay suppliers in cash using local currency, and so allows them to negotiate better prices. We regularly hear of savings of up to 10% on purchases in China made in renminbi through our services.

Doubtless, the leaders of successful mid-sized companies will find even more imaginative ways to use innovative financial products to strengthen and grow their businesses. Our experience is that nobody knows more about mid-market companies than the creative and strategic people who run them. Unlock their potential and the results are often remarkable.