Rick Roache

Ebury, the global non-bank leader in cross border finance for SMEs, is using its successful Australian business as a launch pad to enter Hong Kong’s non-bank trade finance lending market.

Sydney-based Ebury Asia Pacific Managing Director Rick Roache announced that using its Australian strategy as a blueprint, Ebury had started competing head-on with bank and non-bank lenders to meet the funding needs of credit-starved Hong Kong SMEs who exported and imported. It was doing this by offering companies unsecured trade finance as a complementary product for their payables, with line sizes of up to US$5 million per client.

Mr Roache, said he expected strong demand and that the Ebury Hong Kong loan book would grow quickly because of the suitability of Ebury’s trade finance product for Hong Kong clients’ needs.  “Our experience in other similar markets is that growth in our book accelerates over time. In Australia, the book has grown more than 300% in 2021 with the majority our clients using it to finance supply chains into North Asia,” he said.

With a valuation of more than US$1 billion, Ebury is a ‘unicorn’ and has offices across Europe, the Middle East, North America, and Canada. The company began offering foreign exchange (FX) and risk management solutions to Hong Kong SMEs in 2019.

The global fintech has FX and trade finance capabilities in more than 130 currencies and offices in 20 countries linked by a single best-in-class platform. It recently launched the ability to finance cross-border freight and advertising for e-commerce businesses that buy and sell over the internet.

Mr Roache said that many Hong Kong SMEs faced great difficulty getting capital for their business because of red tape, rigid systems and complex lender demands, especially those with volatile revenue and cash flow. Regular rejection of SMEs’ trade finance applications had contributed to a global trade finance gap that the Asian Development Bank estimated was around USD1.5 trn in 2020.

“Ebury is immediately competitive in the Hong Kong market because the features of our trade finance product make it the best available. We offer clients an easy-to-use online platform, complete cost transparency, with absolutely no fees except for the interest charged for credit used. In contrast, competitors often have upfront, draw-down or utilisation fees on top. In addition, our payable finance line offers an up to 150-day repayment period, which is much longer than the industry standard 90-120 days,” Mr Roache said.

“Our clients are increasingly becoming e-commerce-focused businesses which are looking for greater flexibility in working capital solutions. Our trade finance product enables them to pay for advertising and for freight, which are not typically able to be financed cost effectively by traditional lenders. Quite simply, you can use Ebury trade finance longer and for more things, without having to provide security over balance sheet or goods,”.

“This Hong Kong trade finance launch is an important part of our regional growth strategy. Once this business is established it will serve as a launch pad for Ebury into mainland China,” Mr Roache added.

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