ETFL Limited is a company established and operating since 2018 offering trade finance services, and providing alternative financing solutions to small and medium sized entities (SMEs) that are involved in the sale of goods and services.

Problem

Banks require SMEs to have tangible assets to pledge or mortgage to receive a facility, which means the majority of SMEs don’t have access to flexible financing.

Solution

ETFL provides trade finance without asking the SME owners to give personal guarantees or mortgage assets. The only collateral is the invoices issued to the SME customers which are assigned to ETFL.

Companies which supply goods and services domestically or internationally are usually requested by their customers to provide credit – which usually varies from 30 to 120 days. Such requests cause working capital needs which can be met either by banks or trade finance organisations.

ETFL’s clients assign the credit invoices issued to their customers (debtors) to ETFL and receive pre-payment up to 85% of the invoice value to cover their working capital needs. When the debtor settles the invoice by paying the total amount to ETFL, the latter advances to the client the non-discounted element of the invoice less ETFL’s charges.

Market potential

Global Trade Finance Market size was estimated at USD 46 bln in 2022 and USD 49bln in 2023 and is poised to grow to USD 88 bln by 2031, growing at a CAGR of 7.50% during the forecast period (2024-2031).

Every company involved in the provision of goods and services needs trade finance to secure better funding, improve its cash flow and grow its business.

Operating since 2018

ETFL has been operating since 2018 by concentrating on the local Cypriot market and is now looking to expand its operations. Based on audited accounts, it has always been profitable and has never submitted a claim to the credit insurers; this proves the quality of its management and knowhow.

When a supplier wishes to become a client of ETFL, it informs ETFL about the identity of all its debtors, the projected volumes of business for each customer and the offered credit terms.  ETFL then applies to Allianz Trade or Atradius, the two global credit insurers for specific credit limits on those debtors. This means that in the unlikely event that any one of those insured debtors were to default, then ETFL would submit a claim to the credit insurers and recoup the money that it had prepaid.

This means that in the event of default of a trade debtor, the non-collected amount will be recovered from the credit insurer, thus avoiding losses. Essentially, the risk of default of the trade debtor in Cyprus is shifted to the two global credit insurers.

When you invest in the bonds issued by ETFL, the risk of default is very low, since the trade debtors will be pre-insured by either Allianz Trade or Atradius. Since ETFL commenced operations, it has never made any claim τοthe credit insurers; this indicates the expertise of our company and the prudence of its management team.

Allianz Trade is an international insurance company that offers a range of services, including trade credit insurance, debt collection, surety bonds and guarantees, business fraud insurance and political risk protection. It monitors the financial health of over 80 million companies. It is a subsidiary of Allianz SE. The Company has a Standard & Poor’s rating of AA (Very strong).

Atradius provides trade credit insurance, surety and collections services worldwide through a presence in more than 50 countries around the globe. It is the credit insurance arm of Grupo Catalana Occidente. The financial strength rating has been affirmed by AM Best as A (excellent) with a stable outlook and upgraded by Moody’s to A1 with a stable outlook.

ETFL has signed contracts with both Allianz Trade (maturing Feb 2025) and Atradius (renewed to mature September 2025) for credit insurance of its clients.

ETFL Limited (“ETFL”) is offering investors the opportunity to invest in Trade Finance products with the objective to earn better returns than those offered by commercial banks. Investors can invest from as little as €1,000 and earn 5.5% per annum on secured bonds, considering that the underlying assets have been credit insured with Allianz Trade and Atradius, the global multinationals, which reduces the risk of default to zero.

In addition to earning 5.5% per annum return on 1-year maturity bonds, with full security provided since the underlying trade receivables are credit insured with Allianz Trade or Atradius, ETFL allows investors the option for early exit, either by making a request to the Company for buy-back of the bonds, or by selling the bonds on the crowdX Secondary Market.

When an investor decides to exit earlier by giving 30-day notice, then the rate of return will be adjusted as follows:

For example, if the notice is given when the duration of the investment is 45 days, then the rate of return is 2.50% p.a. but if the notice is given after 95 days from the start date, then the rate of return is 3.25% p.a. and this is paid by the Company. By keeping the maximum investment at €25,000, the Company makes sure that it has enough liquidity to meet investor requests for early exit.

Alternatively, investors who subscribed through the primary offering will have the option to sell the acquired bonds on the CrowdX Secondary Market platform to other investors with active accounts with CrowdX, subject to investor interest.

Investors will not incur any fees on CrowdX. There is no onboarding, no brokerage and no custody fees. This means all the return is made available to the investors without deducting expenses.

Equally important is the fact that ETFL uses its own funds to invest in the same trade finance deals, thus aligning our interests with investors and we give a pledge that all the proceeds from crowdfunding will be used to expand the business without any additional costs.

Athos Kyranides

Director

ETFL Limited

The Company is owned by Athos Kyranides who is by far the leading expert in Trade Finance Operations in Cyprus. Athos, born in 1963, is a qualified Chartered Accountant and a graduate of the London School of Economics – Economics Faculty (1983-1986).

After working at KPMG UK, Athos was repatriated by Bank of Cyprus where he set up and managed 3 new companies: the first factoring company in Cyprus (1992), the first factoring company in Greece (1995) and the first venture capital company in Cyprus (2000).

In 2003 he left the Bank of Cyprus Group and set up his own management consulting practice specializing in strategic and financial management as well as business re-engineering, working with clients in Cyprus and abroad.

The proceeds from the issue of the bonds will be used exclusively to invest in fully insured new trade finance deals as the Company seeks to expand its business activities.  The Issuer has the financial strength to support all its expenses and intends to invest the maximum amount in trade finance receivables.

Each time an investment is made in a bond, the total invested amount is used to fund a trade finance deal.

When a deal matures, the bond is redeemed in full and new bonds are issued for a new trade finance deal with a new maturity, specific to the trade finance deal under consideration.

1. Minimum target amount to be raised: €200,000
2. Deadline for reaching the target to raise capital: 30.09.2024
3. Information on the consequences if the target capital is not raised within the deadline:
   The Company is adequately capitalised and financed to cover the needs of its current business portfolio. The only consequence in the unlikely event that the target amount is not met is the slowdown of the growth in its business portfolio.
4. Maximum offering amount when different from the target capital: The Company is in a position to utilise additional funds without limitation, hence the intention to absorb overfunding.
5. Amount of own funds committed: The Company has committed more than €3 mln of its own funds and has no difficulty to sustain the operation.
6. Change of the composition of the Project Owner’s capital: The targeted fundraise of €200,000 corresponds to less than 10% of own funds, and hence there is no impact on the project owner’s capital.
7. Pre-contractual reflection/withdrawal period for retail investors: 4 working days.

We have classified this product as 2 out of 7, which is a low-risk class. The summary risk
indicator is a guide to the level of risk of this product compared to other products.
It shows how likely it is that the Issuer is unable to repay your investment and guaranteed return.

The chart rates the potential losses from future performance at a low level, and poor market conditions are not expected to impact the amount you could get back. Changes to tax laws/treaties may adversely affect returns on your investment.

The risk indicator assumes you keep the product for the full term, which is the minimum holding period. The actual risk can vary significantly if you cash in at an early stage and you may get back less. Market developments in the future cannot be accurately predicted. Actual returns could be lower.

The Company is exposed to general risks such as market, credit, liquidity and geographical risk.