UK-based Prima Dollar helps factories in emerging markets like Bangladesh with their local cash flow. The financier enables factories and buying houses give what buyers want, which is a purchase order without letters of credit and giving the buyer time to pay (60, 90 or 120 days).
Prima Dollar has been trading in Bangladesh for a year and has financed around 90 shipments in its first year, working with over 40 different buyers and suppliers. It has achieved a high level of rolling trades now, with suppliers sticking with it for repeat business. The company has developed a new financial product that is cheaper, quicker and simpler than letters of credit. This new system saves maybe a 1000 dollars for every 100,000 dollars of export volumes.
Prima Dollar pays factories against shipping documents -- often against copies of documents where it has an arrangement with the local bank working in the shipping process. So the factory does not wait for the money, and faces no risk from the financier.
Getting buyers to pay is trickier. There are several techniques that Prima uses to persuade buyers to pay promptly. Typically Prima works in supply chains that repeat business every month. So buyers rely upon it (as well as the factory) to ensure that shipping documents are being cleared.