Tony Duggan CEO Crossflow Payments tduggan@crossflowpayments.co.uk +44 (0) 7748 986 675
Crossflow introduction Tony Duggan - CEO 24.2 million transactions Simon Mansfield - IT £904 mil worth of invoices Director processed through our Tony Pinn- Operations platform Director £9 Bn projected in 2014 as Jack Perschke – a result of our free model Commercial Director Funding capacity of £1.9Bn Carl Maughan - CTO Supply Chain Finance Solution Fully integrated with Free Transaction Processing
Market conditions BoE announced today that ‘credit supply to businesses remains relatively subdued, especially to SMEs’
Market conditions Supplier payment terms are increasing up to 90 days
Market conditions- summary • Longer payment terms • Basel III-Bank lending to businesses falling • Small businesses struggling for cash • Government intervention - ‘Funding for Lending’ scheme
SCF- Traditional Models Buyer Supplier Bank Factoring 25% Drop in SME lending since 2009- £170Bn
SCF- New Models Buyer Supplier Corporate Peer2Peer Hedge Pension Banks Funds Funds
Challenges • P2P industry risk, trust in the market • Anti-competitive behaviour/ Bank dominance • Legislation and Regulatory • Pricing • Liquidity- capacity to provide long term finance
Benefits for buyers • Facilitate own payment strategy • Strengthen relationships • Supplier sustainability- minimise risk
Benefits for suppliers • Access to cash as they need it • Competitive rates • No onerous sign up process • Immediate payment of invoices • Underpins their broader working capital • Engage with new customers who have long payment terms
Overview SCF Schemes Advantage Disadvantage Banks Limited funding availability Expensive lending rates Security requirements for borrowers Factoring Expensive rates Requirement to commit entire ledger Mid to long term commitment Corporate Peer 2 Peer Funds available Competitive lending rates Fully automated
But is it a win-win for everyone? How is it possible to ensure that SCF programmes are not only for large buyers but also for suppliers and SMEs? • Clarity – user friendly – no bells and whistles • Transparency – simple interface – clear information • Simplicity – easy sign up process • SaaS – accessibility • Obligations – security requirements • Costs – set up costs • Credit Ratings – affordable finance?
Issues to consider when selecting a SCF solution • Compliance • Security of funds • Long term availability of funds • Provider business strategy • Ease of use • Hidden costs • Supplier on boarding
IT Implementation • Create benefits for IT • Define integration point • Enable display of transactions available to be financed: into a supplier ’ s system (i.e. marketplace environment) into an invoice matching system (i.e. buyer side) into a different system (i.e. BPO compatible) • Standards • Interoperability • Funds reimbursement • BPO opportunity • Integration speed
Innovation – trends to watch • Corporate Peer-to-peer • The peer- to- peer lending space has also caught the eye of institutional players • By 2015, peer-to-peer lending in the UK will be worth £1 billion a year in loans *Research from Research and Markets’ ‘Peer -to-Peer Lending UK Facts and Figures 2013’
Invitation Network/Q&A Session 10 ipods to be won
Tony Duggan CEO Crossflow Payments tduggan@crossflowpayments.co.uk +44 (0) 7748 986 675
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