Credit Suisse-backed alternative lending start-up, Tradeplus24, is soon launching into Australia from its headquarters in Switzerland as the first step in its international expansion plans after raising 120 million Swiss francs (AUD173.6 million) in debt and equity in February.
The move will be led by ex-Nab exec, Adam Lane, with Australia selected as Tradeplus24’s first overseas market due to a significantly underbanked niche caused by alternative lenders typically not providing loans above $250,000 and traditional lenders struggling to structure cashflow finance smaller than $5 million.
Tradeplus24’s variable credit lines range between $500,000 and $10 million and do not require property as collateral, strongly positioning them to support Australia’s 2+ million SMEs producing $577 billion of GDP.
Its unique model securitises and uses insurance to underwrite the account receivables of SME’s, which removes risk for funders and enables Tradeplus24 to offer more competitive rates.
“We’ve enjoyed immense and rapid success in our home market of Switzerland in just two years of operations, including attracting investment from the likes of Credit Suisse, SIX Group, and Berliner Volksbank, but we always had global expansion in mind when we developed the business,” said Adam Lane, Managing Director of Tradeplus24 Australia.
“We believe several characteristics of the Australian business lending market and wider economy make our offering uniquely well-positioned for success in this market.
“Lack of competition in Australia not only reduces the need for banks and larger lenders to innovate, but also means they’re free to release capital largely under their own terms. To this end, banks regularly take a charge over an entire business and also secure the loan against the owner’s personal property assets. They also struggle to lend without property as security, which is a major factor contributing to the current shortage of capital for Australian SMEs.
“Secondly, Australia’s weakening housing market is also compounding the inability of business owners to secure funding by offering property as collateral for further borrowing, with many ‘running out’ of adequate security to offer.
“Finally, the Banking Royal Commission has put everyone on notice when it comes to credit; there is simply less of it flowing through the economy as a whole. These factors combined create an urgent need for more innovative business credit solutions which don’t require a borrower to put up property assets as collateral.”
While its credit limits may be comparative with significant lenders like Scottish Pacific, Tradeplus24’s automated credit technology assesses SME supply chain data and calculates risk down to individual invoices in real time, making it as fast, agile, and accurate as tech-based alternative lenders.
Tradeplus24 is currently in the advanced stages of negotiating a nine-figure debt facility and is exciting about making a difference by enabling many Australian SMEs to reach their growth potential.