Citi Debuts Working Capital Loans for Commercial Clients

Citi says it wants to help its commercial banking clients meet their working capital needs.

The banking giant on Wednesday (July 19) announced the launch of its trade and working capital eLoans solution for commercial clients in the U.S., designed to help clients meet their capital needs.

According to a company news release, the eLoans platform helps clients by letting them access liquidity while reducing manual touch points and allowing them “to manage outstanding loans via repayment features.”

“Deeper penetration of our digital solutions across corporate market segments means we can support clients in reducing friction in transaction processing and significantly improve their banking experience,” said Christian MacDonald, the bank’s global head of working capital loans in treasury and trade solutions.

The launch comes at a time when businesses — at least small businesses — are finding it harder and harder to borrow money as banks grow more cautious with their lending.

And as noted here last week, that’s led some small and mid-sized businesses (SMBs) to consider new areas of financing, such as turning to their own customer bases for capital by selling bonds to their local communities and end customers.

The practice is called regulation crowdfunding. It has gotten the blessing of the Securities and Exchange Commission and has platforms that facilitate it such as Honeycomb Credit and Mainvest.

“The push towards this credit channel — which we might term hyper-localized — spotlights the appeal of community-based lending and how smaller companies can monetize at least some of the goodwill generated among local clientele and through word of mouth,” PYMNTS wrote.

It also underlines some of the pressures facing SMBs across sectors, as PYMNTS data has shown in a series focused on the challenges and opportunities facing these smaller operations.  

As recently as the end of June, research by PYMNTS showed 40% of SMBs were more worried about inflation than they were a year ago, while roughly 15% have been concerned about the prospect of declining revenues. 

The report “Main Street Health Q2 2023: Credit’s Key Role in SMBs’ Plans,” a PYMNTS and Enigma collaboration, showed that nearly half of SMBs have plans to increase the amount of credit they use or to begin using credit. In addition, 34% of respondents said they do not use credit and want to start doing so, while a third said they’d begin working with larger banks to get the credit they want.