Industry insider: Sit down with TP24’s Nick Reddyoff
Meet Nick Reddyoff, the Chief Product Officer at TP24, a company that’s redefining receivables lending for SMBs across the globe.
Below, Nick shares valuable insights into TP24’s unique lending approach, their automation goals, and the crucial role Codat plays in it all.
What sets TP24 apart?
TP24 targets B2B SMBs. We focus on businesses over a year old, with at least 1 million in revenue, offering working capital solutions from a quarter to 5 million in local currency.
We put the whole accounts receivables book to work. We offer businesses a line of credit based on the value of their outstanding receivables in their entirety, as well as their trading history with their buyers.
What sets us apart from other lenders is the fact that we don’t interrupt the relationships between our clients and their buyers. Unlike other lenders, we don’t require personal guarantees or any bank account changes, which means entrepreneurs can secure funding without putting their personal assets at risk.
As Chief Product Officer, what are your main responsibilities?
I’m focused on enhancing our core software and expanding the tech team. Our aim is to automate services, reducing operational overhead for clients and improving internal efficiency. This focus on automation aligns with our mission to streamline business finance for SMBs.
What challenges were you experiencing that led to you seeking a solution like Codat?
We encountered difficulties in evaluating clients’ receivables files manually, which resulted in operational risks and inconsistencies. Prior to using Codat, we would have to transform the data provided by our clients into a format that could be assessed by our decisioning platform. Once we had an agreement in place with a client, we would have to repeat this process of transforming the data on a weekly basis to assess any changes to their receivables ledger. This effectively meant manually combing through their transactions which would take one full-time employee an entire working day every week.
Aside from this process being incredibly laborious, it obviously led to additional operational risk. We experienced inconsistencies in the data provided, which left us open to fraudulent or accidental data manipulation.
With Codat, we can eliminate the process entirely, reducing our cost to serve customers. As a result, customers who connect via Codat are priced differently to account for the substantial reduction in overhead expenses.
Codat helped us eliminate 40 hours of weekly data processing for client services.
Codat has significantly impacted our business, enabling us to fully automate large parts of our lending process and eliminating the need for time-consuming manual receivables file transformations. This results in a better experience for clients, as well as improving the quality of the data we’re basing our assessments on.
Like other lenders, reducing ‘time to yes’ is a highly important factor for us to ensure as many customers complete the application process as possible. With Codat, we’re able to keep up with our competitors and meet market expectations, especially now that SMBs expect a seamless and efficient experience similar to what they are used to as consumers.
Did you consider any alternative solutions?
When considering alternative solutions to Codat, we found that Codat offered the greatest reach in our target markets, especially within cloud accounting software. That was a big benefit for us. Codat’s collaboration with Open Banking platforms like Plaid also added to their overall service offering.
An additional benefit of Codat is its well-built APIs, providing a great developer experience unmatched by other providers. At times, we’ve found discrepancies between providers’ specs and the documentation they provide. This is not the case with Codat. As a result, we are able to implement technical changes more quickly and efficiently.
Moving to a broader perspective, what trends are you observing in the business lending market?
A notable trend is embedded finance, where being a direct lender is transitioning to distributing through embedded finance players. This shift is crucial, especially as traditional banks may step away from SMB lending during tough economic times. The embedded finance market is expanding rapidly, and as a lender, it’s something you can’t afford to miss out on. We’re aiming to be wherever our clients need financial support.
Looking ahead, what are your plans for TradePlus24 in terms of product and expansion?
Our plans for 2024 and beyond involve distributing our products and software services through other lenders while growing our own lending operations. We’ll focus on partnerships and software clients, extending our reach in Asian markets and exploring opportunities in the SaaS space with our core technology.
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