What Trends will impact Alternative Business Finance?

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Over the ensuing months, we will be profiling the Alternative B2B finance space and the segments and individual companies within those segments.  As part of that, we will be discussing key trends as well, from both the vendors perspective as well as investors.

Example trends to explore include:

  • How will rising interest rates impact the Early Pay Market?
  • Are Corporate Treasurers attitudes and investment guidelines changing around investing in alternative assets with their operating cash?  The recent SEC rule impacting Prime Money Market funds will distort the investment world tremendously.  That distortion will ultimately impact how corporate treasurers invest in many different asset classes.
  • How are Small Business Marketplace lenders using data science and platforms to facilitate bank lending? This one is interesting because so many of the Asset Based Lender (ABL) and Factors would like to better understand the underwriting models that are being deployed today.  If you are looking for speed, ala Kabbage for example, your goal is to deliver a verdict on loans in six minutes, granting up to $100,000 in credit lines to new businesses.  Other platforms that cater to a different segment (middle market businesses greater than $5M in sales) need more manual intervention.
  • Why are Asset Managers becoming increasingly critical to facilitate non bank capital into a company’s trade receivables.
  • How are Supply chain finance programs moving downstream to non investment grade companies? This will an interesting one to explore as I am hearing some banks having success at the $500M to $2bn sales range for solid middle market names.  In the US, that segment represents roughly 18,000 companies. But even here, you need a huge success with the spend file to make it worthwhile.
  • Are new interchange models tied to ACH set to have a major impact on early payment?
  • What are the developments with Einvoicing, eProcurement and Supplier Network Technology vendors and financial capabilities?
  • What Government developments in Europe, North America and Asia are occurring that will impact business lending?
  • How are Banks and Tech Vendors aligning in this space?

What trends do you think are important to discuss?  Contact me at dgustin at tradefinancingmatters.com I would love to hear from you.

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