Many suppliers, especially small and medium-sized businesses, face the lack of working capital and cash gaps very often. It is important for the buyer to postpone the payment for the time he needs, on average, it takes from 60 to 90 days to pay for goods from the date of delivery onwards. At the same time, it is important for the manufacturer to find the funds for that period of time until the funds from the buyer arrived. As a result, the go-to alternative source of cash appears, providing the continuous operation of the enterprise – factoring. It is a type of vendor financing, in which firms sell their creditworthy accounts receivables at a discount and receive immediate cash, but this system is centralized and controlled locally by banks.
There’s a solution called Traxia which creates a decentralized B2B platform for financing, which works through a smart contract running on a blockchain. It provides the participants with the transparency in the supply chain, integrating the smart contracts into the business processes and creating a foundation for buyers and sellers in B2B trading. The participants of Traxia ecosystem make smart contracts which contain such information as volume and duration of an underlying trade, while also become compatible with existing Enterprise Resource Planning (ERP) Systems, Payment Networks such as SWIFT and others. The Traxia Foundation will support such projects as LiqEase Limited, and can invest in enterprises and projects that support the fund's goal. LiqEase is part of the Traxia ecosystem and, in fact, it is the first successful proof of the Traxia ecosystem concept.
Traxia, with the support of LiqEase technologies, is also a tool for modeling and automating the business processes for saving time, costs and improving the efficiency for corporations in their respective supply chains. All these aspects allow LiqEase and Traxia connect to a large market with a huge growth potential.
Traxia ecosystem implies such participants:
The seller who needs the replenishment of working capital. In the Traxia ecosystem, these are often SMEs.
The buyer - the company that purchases the product. In the Traxia ecosystem, the buyer is often a large corporation that has a higher credit rating than the seller, as a rule.
The investor — a person or organization that invests in financial products, assets, etc. with the expectation of the profit.
Issuing Provider - the technology provider that sets up and maintains the Traxia platform regulating the processes of downloading and verifying business and trade data, combining widely used web technologies with modern blockchain infrastructure and making it understandable and transparent for the three previous categories of participants in the Traxia ecosystem.
Listing Provider – the participant of the platform, which monitors the compliance of securities to the conditions and requirements on the platform.
On the whole, the importance of the factoring has already been appreciated by the entrepreneurs around the world. It is much more convenient and opens more opportunities for small companies that could not get a loan at all or only high-interest loans, leveling the whole point. It is one of those cases when all parties win. Thanks to Traxia, a lot of businesses can get a second wind, because the calculation will be simple and reliable.
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