Choco Up, a financing platform based in Singapore and Hong Kong, has introduced a new accounts payable financing product to support small and medium-sized enterprises (SMEs). This initiative is designed to help businesses manage widening cash flow gaps caused by delayed customer payments. The new offering provides a crucial liquidity tool for companies struggling with operational funding.
Addressing a Critical SME Cash Flow Gap
Many SMEs face a significant operational hurdle where they must pay suppliers within 30 days, while their own customers may take 60 to 120 days to settle invoices. This timing mismatch creates a persistent working capital deficit, a problem exacerbated by rising payment delays, which reached 44.39% in late 2025. This pressure can severely constrain a company's ability to fund its growth and daily operations.
This challenge is particularly acute for businesses in sectors like manufacturing, logistics, engineering, and healthcare supplies, which require substantial upfront investment. Percy Hung, CEO and founder of Choco Up, noted that these companies must commit significant capital long before receiving revenue. This situation necessitates flexible and rapid access to working capital that traditional financing often cannot provide.
A Combined Financing Solution
The newly launched accounts payable (AP) product allows businesses to access up to S$2 million in credit specifically for supplier payments. It complements the company's enhanced accounts receivable (AR) financing, which advances up to 90% of unpaid invoices with limits reaching S$5 million per company. Together, these products form a comprehensive supply-chain financing suite for SMEs.
By offering both AP and AR solutions, Choco Up aims to provide a holistic approach to managing an SME's cash conversion cycle. This dual offering allows businesses to not only pay their suppliers on time but also unlock cash tied up in outstanding customer invoices. The integrated solution is positioned to become a core part of a company's operational finance stack.
Leveraging Technology in a Competitive Market
Choco Up enters a competitive market populated by numerous fintech lenders, but it aims to differentiate itself by leveraging artificial intelligence. The platform uses AI-powered tools to streamline the application and underwriting processes for both its AP and AR financing products. This technological focus is central to its strategy for delivering fast and efficient funding.
The company's system automates client document verification and uses algorithms to flag potentially fraudulent submissions for manual review. This is intended to reduce processing times and enhance the accuracy of credit assessments. However, the ultimate success of this model will depend on the quality of underlying data and effective risk management.
The Broader Context of SME Financing in Southeast Asia
The product launch addresses one of Southeast Asia's most significant economic challenges: the SME financing gap. MSMEs constitute about 97% of all enterprises in the ASEAN region but often face barriers to accessing credit from traditional banks. These firms frequently lack the fixed assets or extensive credit histories required by conventional lenders.
This regional issue is a component of a larger global trade finance gap, estimated by the Asian Development Bank to be around US$2.5 trillion. The problem is especially pronounced in Southeast Asia, where fragmented supplier networks and long payment cycles are common. Alternative lenders like Choco Up are stepping in to fill this critical void.
Choco Up's expansion into accounts payable financing marks a pragmatic shift towards addressing the fundamental working capital needs of SMEs. By providing an integrated solution for managing both payables and receivables, the company is positioning itself as a key partner in operational finance. The initiative's long-term impact will be determined by its ability to underwrite risk effectively while delivering the speed and flexibility that growing businesses require.