Published: Jan. 30, 2018
Tradeplus24 AG

Digital Revolution in Lending

Loans are only granted to those who can provide security – sometimes difficult for SMEs that cannot offer traditional collateral, such as real estate. The first fintech investment by Credit Suisse Entrepreneur Capital Ltd. aims to revolutionize secured lending using the latest technology.

How is an SME supposed to get a loan if the only collateral it can provide is pending receivables in the form of invoices its clients have not yet paid? There are specialized providers that make it possible to use these accounts receivable as security. However, to this end, companies must send each invoice to the lender and leave the entire payment processing to them. Due to the resulting large administrative workload, close client relationships are often lost.

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Ben James and Stephen Pike, two of the four founders of Tradeplus24, firmly believe that this is not what Swiss SMEs want. They are optimizing the loan process with an innovative, fully automated solution: SMEs send their accounts receivable ledgers digitally to Tradeplus24 and software checks the open invoices on a daily basis. "Our system taps into various databases and checks whether an account receivable exists, how high the credit limit would be for this company, what its payment behavior is, and so on," explains CEO Ben James. "The administrative workload is low and the companies continue to maintain client relationships themselves."

With this procedure, the value of the accounts receivable ledger is visible and quantifiable. Tradeplus24 retains it as security and pays the SME a corresponding loan. SMEs therefore have the financial means to invest or cover other expenses. Tradeplus24 thus helps to reinforce the ecosystem of local companies – James's declared goal.

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An Idea That Convinces Partners and Investors

With Kessler and AIG, Tradeplus24 was able to acquire significant insurance partners; Credit Suisse markets the service as the exclusive banking partner in Switzerland. Ben James and his team orchestrate a complex ensemble of insurance companies, lenders, companies, technology experts, and debtors. In doing so, the founders can benefit from their many years of experience and networks in the banking business.

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For Credit Suisse Entrepreneur Capital Ltd., Tradeplus24 is the first investment in a fintech company. The financial commitment, network, and knowledge of Credit Suisse Entrepreneur Capital Ltd. are fantastic, insist James and Pike. With the help of Credit Suisse Entrepreneur Capital Ltd., the aim is now to firmly establish the solution in Switzerland and drive the expansion abroad. "Now comes the test: Can our business grow and continue to be interesting for the partners?" asks James. It's looking good: Scalability is ensured with the digital solution, the necessary structures are in place, and the founders are ready to hit the ground running.