Trade finance firm Drip Capital has introduced a new solution called GoTrade to help companies receiving shipments of meat, seafood and other such commodities get B2B payments quicker than usual, according to a press release.
GoTrade, Drip Capital’s trading arm, aims to solve the problem some small- to medium-sized businesses (SMBs) have with attaining working capital. It will attempt to get the B2B world out of the old mode where suppliers were only paid once shipments were cleared by the Food & Drug Administration (FDA). As that can take weeks or even months, some SMBs want faster payment solutions.
On Thursday (May 14), Drip announced a partnership with a New Jersey-based seafood importer for $4 million tied to the new program.
Drip's program allows SMBs to sell off inventory to GoTrade in exchange for working capital, giving the funds at a quicker rate.
“The core value of the company is to innovate and solve the problem of the export-import community,” Pushkar Mukewar, co-founder and co-CEO, said in the release. “GoTrade is part of this effort where we are trying to solve the working capital issues among the buyers' community.”
According to the release, if an SMB imports 40,000 pounds of shrimp from India, for example, the SMB can choose to sell part of the inventory to get 80 percent of the value up front in working capital.
Drip Co-Founder and Co-CEO Neil Kothari said the idea is to give SMBs flexibility in how they deal with the issues of inventory and payment.
“The SMB doesn't have to buy back the entire inventory in one go; instead, it could free up the inventory depending on the orders received,” Kothari said, according to the release. “SMBs can avail a credit line of up to $10 million with just one click and zero paperwork.”
Kothari said the company has capabilities to fund in-transit cargo, and the new product will now allow the company to pay the supplier on behalf of the buyer before the item even reaches the U.S.