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@dan-mcgee
Core Banking - Jan 17, 2017

Access to liquidity is vital for small businesses, which cannot draw on their own financial resources to resolve mismatches in cash flows' timing. However, the liquidity risk does not disappear; it just moves to another party. The fintechs and factoring companies offering immediate payment take that risk. Just as in the financial crisis, the haircuts on the collateral backing their own borrowing will be small right until they need liquidity, when they'll see ballooning haircuts. Expect to see losses when the sources of their capital call in their debts.

@dan-mcgee

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