Tradeshift and CapitalAid are to launch a US$3bn factoring business, which will operate through Tradeshift’s e-invoicing and software platform.

The business will operate across Europe but will have a strong focus on the UK, where CapitalAid is based and was incorporated in April this year.

“This means instant payments and access to cash for small and medium enterprises using Tradeshift. It also means more stable, cash solvent supply chains for our enterprise customers,” says Christian Lang, CEO of Tradeshift.

The fund is not available yet but, Lang outlines, it will be available in a matter of months and will be backed by several large, as-yet unnamed, hedge funds.

“There is an urgent need amongst small and medium-sized businesses, not only for cash and liquidity, but also for innovation in the financing and lending space which is dominated by dinosaurs,” says CapitalAid CEO, Torben Pedersen.

CaptialAid is planning to make the payments on an instant basis to companies invoicing through the Tradeshift platform.

The company claims that this will remove the risk, time and hassle of going through the lengthy form-based credit approval processes required by banks.

“By leveraging Tradeshift data – from both buyers and suppliers – CapitalAid is able to conduct real-time credit analysis and make strategic lending decisions,” Lang points out.