Marco Financial, a new Miami-based startup, is looking to take a trade finance market share of around $ 350 billion for Latin American exporters with its new factoring services business.
Small and medium-sized businesses in Latin America may find it difficult to get the financing they need to launch export operations to the United States and Marco said his goal was to fill this gap with new marketing tools. modeling and risk management that can make better decisions about loan recipients.
“For small businesses in Latin America, access to trade finance to export their products is a major concern and one of the main reasons why many don‘t succeed,” Javier Urrutia, director of foreign investments at PROCOLOMBIA, an organization that promotes foreign investment and non-traditional exports in Colombia, said in a company statement. “In Colombia alone, a 1% increase in the productivity of exporters in our textile industry would translate into 500,000 new jobs for the country.“
The company is supported by a small funding 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 with my own eyes how difficult it is for SMEs in this region to access trade finance that will allow them to export their products. while retaining sufficient capital to maintain their activity,” Peter D. Spradling, COO and co-founder of Marco, said in a statement. “Access to trade finance is one of the biggest obstacles to doing business and the traditional system dominated by banks simply no longer works, disproportionately harming SMEs and further restricting economic mobility and business creation. jobs in emerging markets. Equity financing and a large credit facility allow us to serve this underserved market in Latin America and help build a healthier and more equitable business ecosystem, reflecting an increasingly borderless global economy.“
Spradling met co-founder Jacob Shoihet through the Antler Accelerator, a Singapore and New York-based startup investment and advisory program that connects entrepreneurs and tech operators to launch new businesses. .
Shoihet, a classically trained musician who fell into the New York startup scene through his work at Yelp, was eager to launch his own business and connected with Spradling for common interests in intermittent fasting and sports. .
Small and medium-sized businesses are struggling to receive loans from traditional lenders due to tighter regulations and capital controls dating back to the 2008 financial crisis, according to Marco’s founders. And the long periods that businesses have to wait between when goods are shipped and payment for orders can put undue strain on business operations. Factoring solves the gap by lending to traders according to their receivables.
Marco said he could reduce the length of the loan process from more than two months to a week and provide financing to approved exporters within 24 hours.
The company initially focused on Mexico, Uruguay, Chile, Colombia and Peru, and chose these markets because of Spradling’s previous experience as an importer and exporter in the region.
“We’re looking for companies that target not only massive, sleepy industries, but also those led by executive teams with fresh perspectives and asymmetric insights that position them to topple incumbents,” said Yida Gao, partner at Struck Capital, in a statement. In no time, Marco has assembled a world-class team to tackle the multi-trillion dollar trade finance market in a post-Covid era where SMEs around the world need reliable capital more than ever to finance their operations and growth. We are excited to be part of Marco’s journey to support the suppliers who are the backbone of global commerce. “