OCC: Hello Radoslav, and thank you for taking some time to give us an interview. Can you tell us a bit about Bitbond? What problem are you trying to solve?
Radoslav: There are over 120 million small and medium-sized enterprises around the world (SME’s). They face a global funding gap of $2.6 trillion. This is where Bitbond comes in. It is our aim to make financing available to every business owner who has access to the internet, while simultaneously providing a global investment platform where investors can support businesses all over the world.
Bitbond’s vision is to provide working capital to established businesses to help them grow. These small businesses are typically underserved by traditional banks and financial systems. SME’s generally need additional financing to take the next step, and that is what we facilitate.
OCC: We know Bitbond leverages the Bitcoin Blockchain to speed cross-border transactions and cut back on fees. For both lenders and borrowers, that does make sense because traditional banks charge a fortune on SWIFT transfers. But why the Bitcoin Blockchain?
Radoslav: Originally, the Bitcoin Blockchain was used for the speed and efficiency of cross-border transactions. It’s also accessible with just the internet; meaning there is no need for a bank account connection. It is also worth noting that Bitbond started in 2013. At the time, there were no good or suitable alternatives. However, over the last few years, the Bitcoin Blockchain has become noticeably more expensive per transaction and slower due to an increasing backlog of transactions at peak times.
Therefore, we are gradually switching over to the Stellar network. This is because Stellar is better suited for payments due to its incredible speed and literally almost no cost per transaction (fraction of cents).
OCC: What are the 3 core differences between Bitbond and a traditional lending institution?
Radoslav: Bitbond is specialised in helping SME’s, who are typically overlooked and disregarded by traditional lending institutions. Therefore, we have a tailored service offering focused on fulfilling the specific needs of small businesses. Often small businesses need: Quick Capital, Flexibility and Support during the whole process. These are all demands traditional lenders don’t typically fulfil. Therefore, Bitbond offers the following:
- Machine learning based automated credit scoring. With this technology, we score our applicants within 24 hours; in many cases even faster. This means businesses using Bitbond can have almost instantaneous access to capital.
- Instant capital is vital for small businesses to react quickly within their industries to be successful. This reaction wouldn’t be possible with the lengthy application process associated with traditional lending institutions.
- Bitbond Flex, our recently released product which works like a revolving credit facility. Our borrowers can flexibly ‘Top Up’ or ‘Extend’ their existing loans. ‘Top Up’ means borrowers can get additional capital on top of their existing loan. Whereas ‘Extend’ means borrowers can extend their repayment time on existing loans while reducing their monthly payments.
The final core difference is the personalised support we offer our customers. Bitbond has a team of dedicated account managers for each key market. This team guides businesses through the loan application and provides constant support before, during, and after the distribution of the loan.
OCC: Is Bitbond available globally? If that’s the case, how do you manage regulations?
Radoslav: Yes, Bitbond is available globally with the exception of a number of countries that we have to exclude for compliance reasons. We are a regulated financial institution with a licence from the German regulator BaFin. By signing our contracts and agreements, Bitbond’s customers agree that German law is applicable to them and that they are under German jurisdiction.
OCC: Do you have a roadmap in place? What’s next for Bitbond?
Radoslav: Our biggest projects for the foreseeable future are:
- Rolling out Stellar for payment processing on a larger scale
- Scaling up the partnership and introducer channels for customer acquisition
- Further increase the automation of our credit scoring underwriting
Bitbond is the first global lending platform for small business loans. The company leverages Blockchain technology to connect creditworthy borrowers with individual and institutional investors. Therefore, the service can operate around the world without the need for banks. Bitbond don’t use traditional credit scoring, but rather an alternative data provided during the borrower application in order to rate borrowers. With over 160k users and more than 3,000 funded loans, Bitbond seeks to revolutionize lending.