However, trying economic times have threatened to erase SMEs in recent years, and they now need all the help they can get. With six in ten SMEs reportedly struggling with rising energy costs, and 47% saying the same of the mounting costs of materials, our SMEs need all the help they can get.
The idea for Treyd came from my time at Antler, the early stage VC. It was here that I met my co-founder, Sameh, and where I first spent time talking to small business owners about supply chains and the complications that arise from it. During hours of conversations with business owners from all walks of life, it became clear that there was a common source issue; SMEs are forced to pay their suppliers much earlier than larger businesses pay their suppliers, and there is no available way to finance that. The SMEs we spoke with thought of this as their biggest challenge as a business.
As around 30% of world trade is paid cash-in-advance, this is an issue that affects hundreds of thousands of companies. I recognised that there was a huge opportunity to help SMEs with international supply chains by providing a service whereby companies could sell their products before paying suppliers. So, in 2020, we started Treyd.
Treyd offers businesses a credit limit that they can use to pay suppliers. Before Treyd, SMEs have typically had to turn to banks, a move that is not always successful given that a great business idea doesn’t always translate to a compelling balance sheet, meaning a lot of businesses struggle to secure loans and are forced to either limit their growth or sell parts of their company to raise capital
The issue is compounded by the inflexibility of legacy banks who do not recognise or understand the needs of SMEs. They typically deal with such a large and diverse range of clients that they do not have the time to think of innovative solutions to problems faced by the smaller businesses they work with.
For those who are successful in their application, their capital is then tied up in lengthy supply processes, which are often delayed. This often forces SMEs into undertaking short-term time cutting measures, such as turning to air freight instead of sea freight, despite it being more expensive and worse for the environment.
We, on the other hand, underwrite businesses continually, by connecting directly with their accounting software and run the data through advanced algorithms, meaning we’re more flexible and far more accessible than any bank loan solution. In addition, we let business owners remain in control by avoiding dilution of shares; our aim is never to impose our way of working, preferring instead to let businesses do what they do best.
As an extreme sports enthusiast, I believe in taking risks – but small businesses shouldn’t necessarily have to. Treyd helps small businesses grow, ensuring that good ideas with high-growth potential have a greater chance of success.
To say that our service is the only solution SMEs need is untrue, as a balanced approach should be taken to assess each company’s needs in turn. However, what we can offer is an innovative solution that provides breathing room for companies reliant on international supply chains.
I am truly passionate about helping SMEs to grow, and believe that Treyd is a practical tool for many of the issues facing SMEs today, both in the UK and abroad. With the multitude of pressures facing small businesses today, we are more committed than ever in helping companies reach their full potential.
