The banking giant’s HSBC TradeCash is a trade finance solution that allows customers to share sales invoice data online and borrow against it, according to a Monday (June 15) press release provided to PYMNTS.
“HSBC TradeCash is designed to help customers unlock cash tied up in receivables, with a digital journey that helps reduce administrative burden,” Vivek Ramachandran, global head of trade at HSBC, said in the release. “By providing fast access to funding, we’re helping businesses spend less time on paperwork and more time fulfilling orders, investing and expanding.”
Working capital has become a necessity for businesses seeking to preserve growth and protect liquidity at a time of “heightened volatility, longer payment cycles and rising input costs,” Ramachandran added in the release.
Companies are shifting their capital allocation priorities, and suppliers are discovering that longer payment cycles can tie up cash and place increased pressure on day-to-day liquidity, according to the release.
With HSBC TradeCash, businesses can access working capital faster than a buyer’s standard payment cycle of often 30 or more days, helping to close cash flow gaps, lessen liquidity pressure, reduce administrative effort and support growth, the release said. The buyer settles the invoice later by paying into the customer’s account with HSBC.
Meanwhile, working capital is beginning to look “less like an operating metric and more like an investment decision” for chief financial officers and treasurers, PYMNTS reported in March. What was once seen chiefly as a buffer for payroll, payables and short-term obligations is now being assessed for how hard it can work without placing liquidity at risk.
The B2B payment instrument itself can create economic benefit because modern payment structures can extend payment terms, optimize cash positioning and generate measurable returns on balances.
“Even incremental improvements in payment timing or liquidity deployment can translate into financial returns for large enterprises operating with billions of dollars in annual procurement spend,” the report said. “For CFOs navigating a volatile global economy, that capability is increasingly indispensable.”
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