Private Credit: Merchant Cash Advance ($4.1M)
Receivables originator tokenized short-duration merchant cash advance (MCA) notes. Rolling issuance windows, tiered risk tranches, and enhanced investor reporting delivered structured private credit access. An anonymized practitioner case.
Snapshot
$4,100,000 Investors
128 qualified Timeline
6 months (issuance → post-issuance) Stage
Post-Issuance Platform
INX Status
Tranches live; distributions ongoing Anonymized
Context & Objectives
Issuer: US MCA originator funding working capital advances to SMEs. Needed repeatable, transparent issuance framework to scale investor base.
- Create SPV-based structure issuing short-duration notes.
- Introduce tiered risk tranches (senior, mezzanine) for pricing flexibility.
- Offer rolling issuance windows with automated investor reporting.
Structure & Jurisdiction
SPV issues short-duration notes backed by pools of merchant receivables.
United States; issuance under Reg D framework to accredited investors.
Structured notes; tranches with differentiated coupon & risk profile.
Key Terms (Indicative)
| Offering size | $4.1M |
| Tenor | 3–9 months average duration |
| Coupon | 8–14% depending on tranche |
| Tranches | Senior, mezzanine, junior; waterfall distribution |
| Secondary | INX venue, whitelist transfers only |
| Reporting | Enhanced monthly dashboards & KPIs |
Provider Stack
INX (issuance, trading, registry)
Accredited investor checks; ongoing screening
US securities counsel; Reg D memo & risk disclosures
SPV management, investor reporting, distribution ops
Receivable assignment & monitoring
Bank rails for subscription + coupon payouts
Key Risks & Mitigations
Diversified receivable pools; tiered tranches absorb losses.
Short tenor; rolling windows; venue secondary optional.
Enhanced reporting; receivable verification; audits.
Reg D compliance; accredited-only; disclosures robust.
Lessons Learned
- Investors valued tranche flexibility to match risk/return appetite.
- Rolling windows kept capital efficient and minimized cash drag.
- Detailed monthly dashboards boosted transparency and retention.
Downloads
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