SME finance and the changing role of banks

On 3 February 2015 Charles Thorburn recorded a contribution by the former CreditSquare to International Finance Magazine. The opinion piece addressed disintermediation, the process by which money reaches borrowers through channels outside the traditional banking relationship.

What changed for the borrower

Consider a company buying a competitor. Alongside its bank, it might encounter a fund lending directly or a marketplace bringing in several investors. That introduces more possible structures. It also leaves the company to compare different fees, conditions for drawing the funds and definitions of the assets lenders can claim.

CreditSquare positioned its advisory service in that gap. Its historical offering documents how it described the borrower’s problem. Its founder’s later merchant banking comparison set out a more specific case for a platform aimed at larger SMEs.