The South African FinTech Payabill has launched a product that it says removes the risk of settling bills of international suppliers for small and medium-sized businesses (SMBs).
“Small businesses carry a high credit risk, and it is costly to assess their eligibility for finance, so they have been neglected by traditional lenders,” Payabill CEO Eli Michal told the website Engineering News on Monday (Sept. 27). “Plus, banks and other specialized firms usually 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 offering is 100% digital, fast and compliant.”
Michal says his company’s offering, which was created in partnership with the Sasfin Forex division, lets clients choose when and how often they want to make payments to prevent unneeded strain on their businesses. Payabill lets businesses settle with international suppliers and come to suitable terms of up to 90 days, while also accepting pro-forma invoices for automatic settlements.
According to Michal, online credit decisions are completed within a minute, with simple criteria for eligibility. “SMBs that are eligible for this type of finance have been operating for more than a year, are registered as a CC or Pty, and have an annual turnover between R500 000 and R30-million. International suppliers are settled from as little as R5 000.”
The company says this type of finance is especially useful for small businesses looking to rebuild in the wake of the recent riots in South Africa. To date, Payabill says it has helped about 500 businesses with different types of trade finance.
PYMNTS looked at the world of trade finance earlier this year in an interview with Behalf CEO Rob Rosenblatt, who says this type of buy now, pay later (BNPL) way of doing business should ultimately not resemble the BNPL programs popular in the retail world.
“In-purchase financing is fundamentally different,” he said. “We’re typically talking about much larger transaction sizes, and the underwriting requirements are much more complex. Simply pulling the customer’s personal FICO score and checking a couple of the parameters really isn’t going to do the trick.”