Ann: Investor Presentation, page-136

Just to extend this, and I agree that this is the most likely model, there are other ways to provide collateral for a line of credit which is essentially all a debt warehouse is. Funnily enough, the term debt warehouse was coined by manufacturers or raw materials who would use these materials stored in warehouses as the collateral so I prefer to use line of credit.

Besides using existing capital, a company can also use their accounts receivable as collateral. Pushing this further another alternative would be to sell asset-backed securities and use the funds raised from the sale to purchase a part of their accounts receivable which would then be held in trust for the payment of security holders (principal + interest). The benefit of this approach is that the risk of a customer defaulting on their loan is passed on to the security holders. This probably isn't possible at this stage as CRO doesn't have accounts receivable large enough to make it worthwhile so perhaps down the track.

Debt is needed to fuel accounts receivable which can then fuel more debt, so even something like $50m is a good starting point as CRO can then leverage this. Afterpay, ZIP and everyone else started with a nominal amount and grew it from there. CRO puts up collateral, receives debt, lends to customers, increases its accounts receivable (money owed from customers) and then uses this to access more debt. The cycle propagates itself.