It's just the beginning for Spenda!, page-219

@CDO22

OK, so to summarise you've gone from a statement that Spenda don't have any risk management or underwriting expertise (you said "Do you think they can source funding without any risk management / underwriting expertise?") to stating a concern over lack of agribusiness finance ("These guys have never ever underwritten Agri loans"). If the board of directors came to the same conclusion, that wouldn't be a difficult problem to solve surely?

You are correct in assuming that I have no experience in finance although I have held other fintechs so I'm not completely ignorant of the industry. It appears you consider that you have some expertise in the area. If this is the case, then please provide us with some criticism of the actual James Tyler deal and where you see weaknesses, faults or unaddressed risks with the agreement framework as reported (see below). I would be interested to read your thoughts. I don't know whether he did or did not involve himself with the details of this deal, but I don't see it as implausible that the Chairman and the board may have involved himself in the final approval to go ahead with it. Keep in mind that SPX have been talking about short term trade/supply-chain finance, not lending out for capital goods or farm improvements.

I do agree with you that we are unlikely to see a $100M debt warehouse from the start. Nor is that what Cirralto/Spenda have actually communicated to the market. They have actually said they want to establish a debt warehouse and have aspirations to grow it to $100M. That's my reading of what they have said.

From the Spenda website (I think we can ignore AF's motherhood statement at the end):

Cirralto funds first global Buy-Now-pay-Later transaction between Australia and China
24 December 2021

Key Highlights

• Cross-border BNPL service goes live, marking the commercialisation of the James Tyler agreement with partner Fresh Supply Co.
• The funding, provided through an extended evidence-based approval matrix, delivers certainty in both produce quality, coupled with payment and supply-chain certainty between the Chinese buyers and the Australian producers.
• The launch supports the export of NSW Nectarines and Plums to China under the initial A$2m facility provided to James Tyler, which is now expected to be extended to the second phase limit in the March 2022 quarter, to support air freight sales of produce ahead of Chinese New Year.

Cirralto Limited (ASX: CRO, “Cirralto” or “the Company”) is pleased to provide a market update on the international BNPL funding agreement
(“agreement”) between Tyler James Pty Ltd (“James Tyler”) and Cirralto, as announced on 1 November 2021.

After a month of integration and testing between Cirralto, James Tyler and Fresh Supply Co, the Company has successfully funded the first international BNPL transaction between an Australian producer of nectarines and plums and a Chinese retailer buyer.

Under the terms of the agreement, James Tyler, a cross-border trade facilitator between domestic producers and foreign retailers, accesses BNPL funding from Cirralto, through Cirralto’s wholly-owned subsidiary, Invigo Pty Ltd (“Invigo”), to pay Australian producers before produce has been shipped.

In practice this is achieved through the collection of one-third of the cost of the total purchase order from the Chinese retailer at the point James Tyler has confirmed produce availability through an Australian producer. Once additional requirements have been met, including the supply of export documentation and supplier purchase invoicing, Cirralto confirms the release of BNPL funding for the Australian exporter.

Transaction repayment schedules are dictated by freight selection, with air-freight transactions (as used in this initial transaction) repayable in three instalments over a 120-day period. Sea-freight transactions are repayable in three instalments over a 135-day cash cycle.

Supply-chain certainty is facilitated through real-time traceability between parties. Fresh Supply Co integrates on behalf of James Tyler, to Cirralto’s BNPL platform, where evidence-based funding approval occurs. After approval is given, Cirralto’s proprietary BNPL Merchant Payment service will pay the Australian supplier using Invigo funds, while at the same time establishing the schedule of automated loan repayment events for James Tyler.

Commenting on the transaction, Adrian Floate, CEO of Cirralto, said “The success of this first transaction affirms the collaboration efforts between Cirralto, James Tyler and Fresh Supply Co. We plan on expanding these relationships to deliver increasing value to the business and in turn, our shareholders.

Additionally, we believe the delivery of evidence-based and data-driven lending solutions, will play a significant role in facilitating stronger trading relationships between Australian producers and Chinese buyers.”

Commenting on the transaction David Inderias, Cofounder and CEO of Fresh Supply Co, said “This is a significant milestone on many levels. Through this collaboration, we are facilitating global B2B transactions with data-backed cross-border trade financing.

Personally, I am very humbled to be working with Cirralto to provide business to business buy-now, pay-later financing that supports the agricultural industry, which I’ve long considered to be the backbone of this country. I am looking forward to what this partnership will bring in 2022.”