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Private credit markets have witnessed an unprecedented growth surge over the past two decades, fuelled by the proliferation of high-yield bonds, leveraged loans, and direct lending. These instruments have transformed global capital markets, further funnelling trillions of dollars into businesses across all sectors. Yet, amidst this evolution, one asset class remains conspicuously underutilised in structured credit: trade receivables.
At Tradeteq, we believe this financial dislocation is not just a gap—it’s potentially one of the greatest untapped opportunities in private credit today.
The dislocation at the heart of Structured Credit
Trade receivables represent a vast pool of short-term corporate assets, i.e. the invoices and payments due between businessesthat can be transformed into investable instruments. Despite this, they remain largely absent from structured credit markets. What are the real barriers restricting access to this untapped market?
“Corporates are holding trillions and trillions of trade receivables on their balance sheet, and banks can only serve to a certain degree and help them to provide that liquidity,” explains Christoph Gugelmann, CEO and co-founder of Tradeteq. “On the other side, you have the structured credit market, which has hardly any trade receivables transactions represented.”
For context, while two-thirds of US mortgages are securitised, trade receivables represent less than one percent of structured credit transactions globally. This stark contrast highlights both the scale of the opportunity and the urgent need for innovation to address it.
Technology is the Key Enabler
The reasons for this underrepresentation are not rooted in demand—there is ample interest from corporates and investors alike—but in operational complexity. Traditional finance infrastructures have struggled to efficiently process, package, and distribute these short-term, granular assets at scale.
“There is a financial dislocation in the way that private credit has been absent from trade receivables,” says André Casterman, Chair of Fintech Committee at ITFA and CEO of the TFDi Initiative. “But that is far more complex from an operational perspective. This is where technology is a key enabler.”
With the right technology, investors can automate workflow processes, reach a broader universe of suppliers, and capture the deeper discounts often associated with more granular transactions. The result? Increased efficiency, enhanced investor returns, and a much-needed injection of liquidity for businesses around the world.
Bridging the Gap Between Corporates and Capital Markets
This is where Tradeteq comes in. With a tried-and-tested proprietary tech infrastructure that covers the end-to-end repackaging of the value chain, the mission to bridge this gap by transforming trade receivables into an institutional-grade asset class is no longer just a possibility. Through AI-driven credit analytics, automated transaction workflows, and digital distribution to private credit investors, Tradeteq is bringing standardisation and scale to what was once a fragmented and opaque market.
The evolution of private credit must include trade finance—not only to unlock new opportunities for institutional investors but to ensure a more inclusive, resilient financial ecosystem.
The gap is clear. But so is the opportunity.
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