GoTrade, a trading arm of Drip Capital, Inc., announced that it has sealed a deal worth US$4 million with a leading seafood importer based out of New Jersey.
Access to working capital has been a problem among SMBs for a while now. In most of the cases, importers must pay the suppliers once their shipment is cleared by the Food and Drug Administration (FDA). This process could take from a week to a couple of months, locking the working capital for the buyer for that period.
A client of Drip Capital explains that amidst limited working capital and reduction in number of fresh orders, GoTrade’s credit line helped them in sourcing 50% more shipments during the peak season, thereby servicing their retail partners efficiently while beating competition, as well as getting rid of complicated and expensive letters of credit which their suppliers in Indonesia and Vietnam were insisting on.
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There is significant demand for alternative financing options globally, especially among SMB-dependent economies. Drip Capital has been offering this inventory financing product to the importing community in the US for about a year now. Previously, the Palo Alto-based company has been providing post-shipment financing solutions to SMBs in emerging economies such as India and Mexico. So far, the company has issued credit worth US$800 million to over 400 exporters in these countries.
Talking about the development, Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital said, “The core value of the company is to innovate and solve the problem of the export-import community. Go-Trade is part of this effort where we are trying to solve the working capital issues among the buyers’ community.”
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