Debitum debuts in alternative finance space
Lithuania-based Debitum Network will launch its ecosystem that connects small businesses with investors for alternative finance (AF) options, based on blockchain technology.
The service is due in September. The upcoming firm says that start-ups and firms with low credit scores struggle to acquire financing, with banks rejecting over 50% of loan applications from SMEs, with 70% in developing economies.
Even for those having their loans approved, paperwork drags down the business.
Last year in the UK, for example, business borrowing via AF rose 43% year-on-year. Recent figures from the World Bank estimate that the global alternative finance market for small businesses could grow to as much as $90 billion in 2020, from its current figure of $34 billion.
Debitum explains that the most common of these alternative forms of funding are crowdfunding, equity crowdfunding, asset-based lending, borrow money against your outstanding invoices (including factoring), and P2P lending.
Through Debitum, small businesses from all over the world will be able to access finance that will connect local infrastructure with global investors.
The service uses blockchain technology to automate its processes, while transactions are carried out in traditional fiat currency – to make it accessible to those inexperienced in the crypto-currency market.
While business bank loans often have a maturity of one to five years, Debitum offers shorter payback times of two to six months.
Debitum promises to offer loans faster – sometimes in as little as an hour.