{"id":8924,"date":"2016-03-17T07:00:01","date_gmt":"2016-03-17T07:00:01","guid":{"rendered":"http:\/\/www.openbusinesscouncil.org\/?p=1579"},"modified":"2020-02-27T09:01:38","modified_gmt":"2020-02-27T09:01:38","slug":"what-is-a-business-loan","status":"publish","type":"post","link":"https:\/\/www.footballthink.com\/what-is-a-business-loan\/","title":{"rendered":"What is a SME Business Loan?"},"content":{"rendered":"
<\/a><\/p>\n SME Business Loan and Trade Finance – Context.<\/strong><\/p>\n It is a well-known fact that SMEs play crucial role in sustainable growth of regional market.<\/p>\n There are various definitions to be found online as to what trade finance and how to get a business loan process. Trade Finance and a business loan\u00a0is described both as a \u2018science\u2019 and as \u2018an imprecise term covering a number of different activities\u2019 related with getting funding, loan for s SME. There are a wide range of tools at the SMEs\u2019 disposal, all of which determine how cash, credit, investments and other assets can be utilised for trade.<\/p>\n In its simplest form, a giving SME, for example an\u00a0exporter\u00a0requires an\u00a0importer\u00a0to prepay for goods shipped. The importer naturally wants to reduce risk by asking the exporter to document that the goods have been shipped. The importer\u2019s bank or trade finance provider assists by providing a\u00a0letter of credit\u00a0to the exporter (or the exporter’s bank) providing for payment upon presentation of certain documents, such as a\u00a0bill of lading.<\/p>\n The exporter’s bank than may make a loan to the exporter on the basis of the export contract. The type of document used in the process depends on the nature of the transaction and how evidence of performance can be shown (i.e. bill of lading to show shipment). It is useful to note that banks only deal with documents and not the actual goods, services or performance to which the documents may be relating to.<\/p>\n SME role in UK and Europe.<\/strong><\/p>\n UK has above 5.4 million SMEs and as shown below SMEs are dominating the EU\u00a0market for number of firms and have above half market share for number of workers. UK is a powerful market for SMEs and there is more and more things in this area special in the area of trade finance. On an EU level Spain and Italy are leading in the terms of importance of SMEs.<\/p>\n