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Miami-based Marco Financial Is Launching A Revenue-based Lending Service For Latin American Smes

Nigeria Student Forum / General Discussion / Miami-based Marco Financial Is Launching A Revenue-based Lending Service For Latin American Smes

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Sani Ibrahim
Abubakar Tafawa Balewa,University
Agricultural economics and extension
100Level, Nigeria.
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Marco Financial , a new Miami-based startup, is looking to take
a piece of the roughly $350 billion trade finance market for
Latin American exporters with its novel factoring services
business.
Small and medium sized businesses in Latin America can
have trouble getting the financing they need to launch export
operations to the U.S. and Marco said it aims to bridge that
gap with new risk modeling and management tools that can
make better decisions on who should receive loans.
“For smaller businesses in Latin America, accessing trade
finance to export their goods is a major concern and a top
reason why many don’t succeed,” said Javier Urrutia, Director
of Foreign Investments at PROCOLOMBIA, an organization that
promotes foreign investment and non-traditional exports in
Colombia, in a statement from the company. “In Colombia
alone, a 1% increase in exporter productivity in our textile
industry would result in 500,000 new jobs for the country.”
The company is backed by a small seed round from Struck
Capital and Antler and over $20 million in a credit facility
underwritten by Arcadia Funds.
“As a former owner of a small business in Latin America, I
saw firsthand how difficult it is for SMEs in this region to
access trade financing that will let them export their goods
while retaining enough capital to keep their business
running,” said Peter D. Spradling, COO and co-founder of
Marco, in a statement. “Access to trade finance is one of the
greatest hurdles in business operations and the traditional
system dominated by banks is simply not working anymore,
disproportionately hurting SMEs and further restricting
economic mobility and job creation in emerging markets.
Equity funding and a material credit facility let us serve this
underserved market in Latin America and help build a
healthier, more equitable trade ecosystem reflective of an
increasingly borderless global economy.”
Spradling met his co-founder Jacob Shoihet through the Antler
accelerator a Singapore and New York-based early stage
investment and advisory services program that connects
entrepreneurs and tech operators to launch new businesses.
Shoihet, a classically trained musician who fell in with the
startup scene in New York through work at Yelp was eager to
launch his own company and connected with Spradling over
shared interests in intermittent fasting and sports.
Small and medium businesses have hard time receiving loans
from traditional lenders thanks to tighter regulations and
capital controls dating back to the 2008 financial crisis,
according to Marco’s founders. And the long periods that
companies have to wait between when goods are shipped and
orders are payed can put undue pressure on business
operations. Factoring solves the gap by lending to merchants
based on their receivables.
Marco said that it can reduce the length of the loan origination
process from over two months to one week and provide
funding to approved exporters within 24 hours.
The company is initially focused on Mexico, Uruguay, Chile,
Colombia and Peru, and chose those markets because
Spradling’s previous experience as an importer and exporter
across the region.
“We look for companies that not only target massive, sleepy
industries but also for ones that are led by management teams
with fresh perspectives and asymmetric information that
position them to upend incumbents,” said Yida Gao, partner at
Struck Capital, in a statement. “In short order, Marco has
assembled a world-class team to tackle the multi trillion-dollar
trade finance market in a post-Covid time when SMEs around
the world need, more than ever, reliable capital to fund
operations and growth. We are excited to be part of Marco’s
journey to support the suppliers that are the backbone of
global trade.”

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