Digital lender Revolut has signalled it intends to start offering trade finance, marking the US$45bn fintech’s first step toward business lending.

London-headquartered Revolut advertised for a head of trade finance this week, seeking an experienced professional to lay out “the vision for the trade finance business from scratch”.

The advertisement suggests the fintech plans to target SMEs, which make up the bulk of its existing business customer base. It is searching for a professional with more than eight years’ experience in trade or supply chain finance and “deep knowledge of and relationships in the EU and UK mid-sized trade finance industry”.

Revolut currently offers multi-currency business accounts with some currency risk management services. The company’s most recent accounts say it onboarded 20,000 SME customers per month by the end of 2023, across Europe, the US and Australia.

The fintech does not yet provide business loans, according to its website.

In 2023, Revolut reported interest income of £500mn from personal lending, and the same year posted a pre-tax profit of £438mn, its first substantial profit since it was founded by entrepreneur Nikolay Storonsky in 2015.

Revolut did not respond to an interview request and written questions from GTR about its plans for trade finance.

The fintech was granted an EU banking licence in 2021 and a restricted UK banking licence in July this year.

Revolut is likely to offer invoice financing and similar products that are already widely available, says Eric Li, head of competitor analytics at Coalition Greenwich.

Its entry could add to competitive pressure in this segment of the trade finance market, but given the large trade financing gap for SMEs, “I’m sure all of them can co-exist”, Li adds.

The market opportunity has grown following the collapse earlier in December of London-headquartered invoice financier Stenn. Some competitors have reported a spike in new enquiries from Stenn’s clients, GTR previously reported.

In addition to supply chain finance and factoring providers, digital lenders such as Bibby, Newable and White Oak offer trade finance products to SMEs in the UK or EU, but Revolut’s most recent US$45bn valuation, in August 2024, makes the company a high-profile new entrant.

The company also boasts a £17.4bn balance sheet, as of the end of 2023, although it may seek funding from investors for a trade finance push. The firm is also hiring staff for structured funding roles with remits to attract capital from investors such as banks and pension funds, according to online advertisements.

André Casterman, advises startups and financial institutions on topics including trade finance, says Revolut’s interest in trade finance is an example of an “exciting” trend of fintechs filling a gap in the SME market created by banks’ focus on larger and more profitable clients.

“The mid-cap businesses using Revolut for payments represent a business development opportunity on the lending side,” Casterman tells GTR, adding that the company may be eyeing using trade finance to help monetise data collected from its payments activity and increase the “stickiness” of current clients.

The fintech will need to “equip themselves with the appropriate due diligence and credit underwriting processes” in order to tap the “ample” liquidity available from capital markets, he adds.

Revolut waited almost three years to receive a banking licence in the UK. Regulators had concerns about the rapidly growing fintech’s ability to tackle financial crime risks, Bloomberg has reported.