Demica’s mission is to enable the rapid deployment of technology driven working capital solutions to large corporates globally. This can be achieved either through arranging and structuring deals directly with our customers or through white label solutions with financial institutions. We maintain close, active, relationships with numerous banks and institutional investors with whom we work to achieve this objective. We are proud of these partnerships and the excellent risk-adjusted returns our funding partners have achieved.
Our close relationships include a mix of the largest global banks, strong regional institutions and niche-specialists. This unparalleled network enables us to assemble syndicates of funders for the largest programmes as well as successfully cover more specialist requirements.
Large banks have the lowest cost of capital and will continue to be the backbone of trade receivable finance. However, due to regulatory changes, we believe that non-bank funders such as insurance companies and pension funds will become progressively important.
Non-bank funders working with Demica have the opportunity to fund receivables and payables finance programmes for corporates that are underserved by their existing finance relationships. These may include more leveraged sub-investment grade companies and those in less well banked jurisdictions or more challenging sectors, all of which would like greater access to the cost effective working capital solutions offered by Demica.
Multinational corporations partner with us to address both counterparty and concentration risk where bank led solutions can result in heavy reliance on one financial institution. Demica mitigates this risk through extensive syndication capabilities, structuring and reporting expertise and independent nature of Demica’s advanced technology solution.
The onset of Basel III is also expected to make it uneconomic for banks to fund those parts of a programme that are internally rated below BBB (colloquially called the Mezzanine) – these can be up to 15% of a facility size for non- investment grade clients, for those with lower quality receivables or for those seeking higher advance rates. Our banking partners are approaching us to bring non-bank funders into their programmes to address these changes. Mezzanine investors, now taking the first external loss, look to Demica’s unique platform and expertise to mitigate their risk.
We are proud to partner with banks and alternative finance providers selectively to deploy our technology, products and platform solutions on a white label basis.
If you would like to discuss the opportunity to work with us to develop your capital, please contact us on +44 (0) 20 7450 2500.