Sanjay Padhee
Feb 26 · 5 min read

It’s high time small businesses receive the treatment they deserve

Graphic designers, small legal firms, independent construction workers, mechanics, marketing agencies and accountants: it’s easy to take for granted the plethora of small businesses found on the world’s doorstep. Yet small and medium-sized enterprises (SMEs) are unsung heroes: they form the backbone of the global economy, dominating employment, innovation and growth.

So it is unconscionable that SMEs are fettered and curtailed by a World Bank-recognised credit famine that — unless tackled — will prevent them from ever reaching their true potential.

Today, I’m delighted to introduce Clear Factor. Our vision: to give every viable SME access to the affordable working capital they need to grow. We will do this using a transparent, democratised marketplace that brings unique benefits for SMEs, investors, underwriters and brokers alike. Welcome to the fair-finance revolution for small businesses.

For SMEs, the financial crisis of 2008 has never ended.

Many people underestimate the importance of Small Medium Enterprises to the global economy. They account for 99% of companies. They are the single largest constituent of both global employment and GDP. But SMEs are not treated fairly.

Thousands of SMEs fail every year because they can’t access finance

Cashflow remains the biggest challenge for SMEs. Their principal credit option is the banks but huge numbers are rejected point blank. The global SME credit gap now stands at $2.6tn according to the World Bank.

In 2008, many big banks stopped lending overnight and huge numbers of small businesses went under. Even today, thousands of SMEs continue to fail every year because they can’t access the finance they need. In 2019, this injustice must end for good.

Why should SMEs accept onerous conditions to access the finance they need?

SMEs that are able to get credit often do so via invoice financing, a lending product that has grown rapidly over the last decade. It allows SMEs to borrow against invoices owed to them. But in doing so they can face rip-off fees and charges that prey on their desperation.

SMEs are often contractually bound to the same lender and rate for every invoice owed. It’s an old-fashioned and inflexible model full of hidden fees and exorbitant break clauses. Directors of SMEs find they can often only borrow a small fraction of each invoice, despite providing personal assets by way of guarantee.

Clear Factor’s vision to disrupt the invoice factoring marketplace

Clear Factor will revolutionise finance for small businesses. To give every viable SME access to affordable working capital, we’ll build a borderless global community of SMEs, investors, underwriters and brokers.

It’s a totally new kind of ecosystem designed from the SME up, rather than the bank down. There will be no unfair exploitation of any constituent, with power more equally distributed and incentives for good behaviour.

In practical terms, SMEs will always get the best rate possible in the market for each individual invoice. All the onerous conditions of the current system, such as minimum contracts, hidden charges, debentures and personal guarantees, will be a thing of the past.

Clear Factor will revolutionise finance for small businesses

Why we will succeed

We’ve put together a credible and experienced team with the skills and knowledge required to establish a beachhead in the established invoice-factoring industry. Our team have worked in senior roles at CHAPS, Bank of England, Lloyds Commercial Finance, Vocalink, Goldman Sachs, Credit Suisse, M&S and Selfridges. On the technical side, we have a strong group of researchers and academics with extensive experience in cryptography and decentralised protocols.

Many startups flounder as they lack the required infrastructure and partnerships to succeed, despite a viable product. We’re delighted to have Decimal Factor as our partner. As a well-established registered broker in the space, they will provide access to provide new-business leads, access to proven credit-scoring algorithms and granular insight into 600,000 SME prospects from day one.

Our solution is based on two blockchain technologies that are tried, tested and reliable. Ethereum creates smart contracts for the outcome of each invoice finance auction. Stellar provides cross-border money transfers of invoice finance in any currency.

FactorToken™ (FXO) lies at the heart of the ecosystem. It has been designed to maintain its value, have a stable supply, and incentivise holders to retain it. In addition, a feature suggestion protocol will allow those within the ecosystem to help guide its response to unforeseen technical and marketplace challenges.

Access to affordable working capital for every viable SME

Building the future of finance for small businesses

Too many SMEs have failed over the last ten years, many as a result of working capital challenges. We must play our part to ensure that such a situation never happens again. Clear Factor’s platform will support growth amongst the many SMEs around the world currently in need of help, and ultimately help drive vital job creation in developed and emerging markets alike.

Given that around half of all banking jobs may be lost to automation over the next few years, the finance sector will require new, more flexible approaches to job creation. Clear Factor’s system will play a role here: incentivising individuals and companies to work to create value within the ecosystem — creating additional revenue streams and new kinds of jobs.

Visit today to join the Fair Finance revolution today and help the world’s SME’s finally get the treatment they deserve.


Clear Factor company development news and opinions on SME invoice financing. Visit us at

Sanjay Padhee

Written by

Co-Founder and CEO at Passion is unlocking the power of blockchain and decentralised technologies to empower the small business economy.


Clear Factor company development news and opinions on SME invoice financing. Visit us at

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade