Trade finance fuels global commerce, but accessing capital remains a persistent challenge. The trade finance gap surged to $2.5 trillion in 2022, reflecting a growing disconnect between available capital and businesses in need.
SMEs, particularly in emerging markets, struggle the most. Banks, constrained by compliance obligations and risk exposure concerns, frequently decline creditworthy applicants. As a result, businesses with confirmed purchase orders and strong transaction histories often face cash flow shortfalls.
We are exploring a blockchain-based trade finance token designed to expand liquidity by linking capital providers directly to short-term trade transactions.
This system could open new opportunities for investors seeking stable yield while giving businesses an alternative source of working capital.
Discussions are ongoing with trade finance providers, blockchain developers, and institutional liquidity sources to design a model that provides profitable, transparent, and low-risk participation for all stakeholders in global trade.
This paper outlines the existing funding shortfall, the business model for the token, how capital providers and investors generate returns, and how the entire ecosystem functions.
Trade finance underpins 80% to 90% of global trade, yet a large portion of businesses struggle to obtain financing. Banks reject approximately 40% of trade finance applications from SMEs, largely due to stringent risk models, lack of collateral, and compliance hurdles.
Market opportunity breakdown (2022 figures):
*Source: Asian Development Bank (ADB), Future of Trade 2024
Businesses with valid purchase orders often turn to expensive non-bank lenders or, in many cases, are forced to cancel transactions due to lack of financing. Liquidity exists in the market, but current risk models prevent it from reaching businesses that need it most.
The proposed trade finance token system would allow businesses to secure short-term funding backed by tokenized trade instruments. Investors and liquidity providers can fund trade transactions directly, earning yield in the process.
Key system components:
These features would allow the creation of a secondary market for tokenized trade finance instruments, enabling early liquidation options for investors.
The ecosystem is structured to generate sustainable returns for all stakeholders, ensuring that liquidity flows efficiently while mitigating risks.
3.1. Token Holders (Retail & Institutional Investors)
3.2. Businesses (Importers & Exporters Seeking Funding)
3.3. Liquidity Providers (Institutional Capital Providers & Hedge Funds)
3.4. Trade Finance Brokers & Underwriters
The traditional trade finance model has long been profitable for banks and private lenders, generating double-digit returns with low default rates. By tokenizing trade finance assets, this model becomes accessible to a wider range of investors while keeping risk management intact.
Risk Mitigation Measures:
For businesses, the benefit is simple: cheaper, faster capital that is tied directly to real transactions, not speculative lending.
A blockchain-based trade finance token requires market adoption, regulatory alignment, and institutional participation. We are working with trade finance providers, liquidity partners, and blockchain developers to structure a functional model.
Planned milestones:
Institutional capital providers and regulatory stakeholders are being engaged to ensure compliance and a clear path to adoption.
A blockchain-based trade finance token could provide an alternative source of liquidity to businesses struggling with traditional financing roadblocks. By offering stable returns for investors, real-time settlements, and programmable risk management, this model introduces a transparent, scalable approach to trade finance.
We are open to discussions with institutional investors, liquidity providers, and regulatory stakeholders as we move toward structured pilot transactions.
For further engagement, contact us directly.
Financely advises growth-focused businesses on accessing capital by introducing their opportunities to professional investors. Financely is not a securities broker or dealer. Where appropriate, engagements are coordinated with regulated broker-dealers, investment banks, legal counsel, and other specialists.
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Advisory services are reserved for post-revenue companies that recognize the time and resources required for professional underwriting.
All mandates start with an RFQ. We review submissions, issue a brief Go/No-Go memo, and where bankable, release a Term Sheet that leads to funding. We arrange capital across Senior Secured, Unitranche, Second Lien/Mezzanine, Preferred Equity, and Gap Solutions. We do not process deals by email or chat.
Letters of Credit, Standby LCs, Confirmations, Receivables Finance, and Inventory Lines with control.
Funding arranged for trade flows with instruments sized to your cycle and aligned to delivery and settlement.
Move forward to secure working capital and keep goods moving. Submit the RFQ to start underwriting for funding.
Limited or non-recourse structures for energy and infrastructure with lender-ready materials.
Funding solutions aligned to project cash flows with credible covenants and conditions to reach notice to proceed.
Advance the file to termable status. Submit the RFQ so we can underwrite and secure funding.
Debt and Preferred solutions anchored on cash flow, Quality of Earnings, and clear closing mechanics.
Funding across senior, unitranche, and preferred to match stable cash flows and acquisition timelines.
Get financed on workable terms for closing. Submit the RFQ to start underwriting.
Acquisition, development, bridge, and refinance with lender-ready packs and third-party reports managed.
Funding calibrated to DSCR, leverage, and tenancy with terms designed to close.
Move to a financeable package. Submit the RFQ to initiate underwriting for funding.
KYC and Source of Funds required. Engagements are best-efforts and subject to underwriting. Preference for operating companies with meaningful revenue. See our FAQ and Procedure.
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