Choco Up, the Singapore- and Hong Kong-based alternative financing platform, has launched an accounts payable (AP) financing product aimed at small and medium-sized enterprises (SMEs) facing widening cash flow gaps between supplier payments and customer collections.
The product allows businesses to access up to approximately SGD2 million (~US$1.56 million) in credit for supplier payments. It sits alongside Choco Up’s accounts receivable (AR) financing product, which can advance up to 90 per cent of unpaid invoices, with funding limits of up to approximately US$3.9 million per business.
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The company is positioning the combined offer as a supply-chain financing suite for SMEs that need to pay suppliers before they receive payment from customers. That is a familiar pressure point across Southeast Asia, where SMEs often operate with limited collateral, thin cash buffers and payment cycles that can stretch well beyond 60 days.
The cash-flow problem behind SME growth
For many SMEs, the challenge is not simply winning contracts. It is financing the execution of those contracts.
Businesses in manufacturing, logistics, marine and offshore, engineering, healthcare supplies, wholesale, B2B technology and professional services often need to buy inventory, pay subcontractors or mobilise teams before revenue is collected. Suppliers may demand payment within 30 days, while customers can take 60, 90 or even 120 days to settle invoices.
That mismatch can turn growth into a working-capital problem. A company may have signed orders and a credible revenue pipeline but still struggle to fund procurement, payroll or project delivery. Traditional bank financing does not always move quickly enough for these situations, especially for SMEs without substantial fixed assets or long credit histories.
Choco Up said delayed settlements have become more pronounced, citing slow payments rising year-on-year to 44.39 per cent in the fourth quarter of 2025. The figure underlines a broader reality: SMEs are increasingly being asked to absorb financing pressure across the supply chain.
“These businesses often have to commit significant upfront resources to procure materials, fulfil orders, or deliver projects, while receiving customer payments only months later,” said Percy Hung, CEO and founder of Choco Up. “They also frequently require access to sizeable amounts of working capital at short notice, which traditional financing channels may not always be able to provide quickly or predictably.”
Why this matters in Southeast Asia
The product launch comes as SME financing remains one of the largest unresolved gaps in the region’s financial system.
MSMEs account for about 97 per cent of enterprises in ASEAN and contribute a major share of employment across the region, according to ASEAN policy research. Yet access to credit remains uneven, particularly for smaller firms that lack collateral, audited financials or established banking relationships.
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The Asian Development Bank has estimated the global trade finance gap at around US$2.5 trillion, with SMEs disproportionately affected. While that is a global figure, the implications are acute in Southeast Asia, where cross-border trade, fragmented supplier networks and extended payment terms are common features of business.
Singapore has a more developed financial infrastructure than many neighbouring markets, but SMEs still face pressure from rising costs, cautious lenders and slower customer payments. In markets such as Indonesia, Vietnam, the Philippines and Malaysia, the issue can be more severe because of fragmented credit data and less standardised invoicing practices.
This is where alternative lenders, embedded finance players and supply-chain finance platforms have tried to build a wedge. Instead of underwriting only against historical financial statements or hard collateral, they increasingly use transaction data, invoices, payment history, platform integrations and bank account flows to assess creditworthiness.
A crowded financing market
Choco Up is not entering an empty category. Across Southeast Asia, SME financing has attracted a wide range of fintech players, including Funding Societies, Validus, Capital C, Aspire and regional invoice-financing providers. Globally, supply-chain finance and receivables platforms such as C2FO, Taulia, Stenn and PrimeRevenue have built models around improving cash conversion for suppliers and buyers.
The competitive question for Choco Up is whether it can deliver speed and risk control at the same time. SME lending is attractive because the financing gap is large, but it is also difficult because default risk can rise quickly when economic conditions soften or when businesses use short-term financing to cover structural cash-flow weakness.
Choco Up said the new AP and enhanced AR financing products will use AI tools to streamline applications and underwriting. The company said its systems automate client document checks and flag potentially fraudulent submissions for human review. In theory, that should reduce manual processing time and improve credit assessment.
But AI does not remove credit risk. In SME finance, the quality of underlying data matters more than the sophistication of the model. Fraud detection, invoice verification, counterparty checks and repayment monitoring are likely to determine whether the product scales safely.
From growth capital to working capital
Choco Up has historically positioned itself around alternative financing for growth companies, offering non-dilutive capital to SMEs and digital businesses. The AP financing product shifts the emphasis more clearly towards working capital and supply-chain liquidity.
That is a pragmatic move. Equity funding has become harder to secure across Asia since the funding correction, and many SMEs do not fit venture capital’s return profile in any case. Debt and revenue-based financing providers have therefore sought to serve businesses that are growing but not necessarily venture-scale.
For SMEs, the appeal is straightforward: preserve cash, pay suppliers on time and continue fulfilling orders while waiting for customers to settle. For Choco Up, the opportunity lies in becoming part of a company’s operating finance stack rather than a one-off capital provider.
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The next test will be execution. If Choco Up can underwrite quickly without loosening credit standards, its combined payables and receivables product could find demand among procurement-heavy SMEs in Singapore and beyond. If payment delays worsen, the market need will only grow.
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