When I tell people what we are doing, I get asked, so you’re a P2P business lender? No. OK, so you’re an invoice marketplace? No. So what are you? Trade Ledger is a technology vendor. We’ve built a digital platform that overcomes the challenges that banks and other specialist (non-bank) lenders face in creating new profitable lending solutions for high growth businesses. So you do Trade Financing? Yes, but we also do Supply Chain finance, Debtor Finance, Balance sheet lending, Equipment Leasing and a whole host of other working capital lending solutions, for our customers.
Our premise is simple – digital information and new technology opens new levels of transparency into global trade, thereby allowing lenders to reimagine new types of lending products not possible before, while maintaining (often improving) their compliance, risk and underwriting obligations. We think of it as better business lending, but everyone we talk to will try to put an existing lending label on it.
The reality is, if you can imagine it, we can do it. Ok, it’s not quite that simple. In fact it’s incredible hard. But the limitations are not what you think. Most companies now create digital information stored in the cloud. And they are willing to permit access, if they believe the service provider to be trustworthy, plus they see value in doing so. The processes of lending from:
no longer has to be discrete and contained within the walls of a bank. Customers already consume other business services where they want, how they want and when they want. Lending will be no different. The market is going to switch very rapidly. If banks don’t keep up with these changes in service delivery demands, some one else will.
Amazon has lent over $3bn to small business sellers in a handful of countries and the pace is accelerating (S1bn in less than a year). PayPal is the fastest growing business lender in at least one market that I’m aware of.
Consider the Amazon acquisition of Whole Foods as a parallel scenario. No one though that the established retail leaders could be so comprehensively displaced overnight…. until it just happened. Tencent Holdings is similarly going to be in a position to displace banks in lending with its innovative conversational commerce (WeChat) inspired offerings, in my opinion.
Today tech companies have limited lending mainly to merchant cash advance facilities. But how long do you think it will be before they provide a range of full facility lending solutions that are easier to consume by businesses? Banks don’t have the technology capability to compete with this change. It’s not the banks fault, they have constraints that tech companies don’t today. That is what Trade Ledger is designed to do, We’re a technology platform for banks that want to compete in the digital business lending market.