Best non-bank site for trade finance: LTPTrade
When three ex-Deutsche trade-finance bankers decided to set up LTPTrade in 1999 they had a simple aim. At least it sounded simple. "We started LTPTrade because we believed there was a better way to do trade finance," says James Parsons, managing director and co-founder of the platform.
He's right. At the time, secondary market trading in trade-finance assets relied on faxes, phone calls, and knowing the right people. The task for LTPTrade was to make it open and electronic - more like the bond market. It has been a long, slow process but the platform continues to make excellent progress.
It is difficult to make such a bold change in the way the secondary market works. Competitors have found that out the hard way, running out of funds before they could launch or make a significant impact. That has left LTPTrade to lead the way in trying to drag an inefficient, paper-heavy industry into an electronic environment.
Secondary market distribution of trade-finance assets has traditionally stuck to the old method of bankers phoning around their contacts and selling to the highest bidder. And this practice still dominates. Even when a trade is agreed, it is usually subject to approval of documentation, so thick wads of paper often have to be couriered from one firm to another and deals can take much longer to complete than in more commoditized markets.