ETR Digital and Investec Capital Solutions have joined forces on a transaction using Working Capital Notes (WCNs), a digital alternative to traditional paper bills of exchange and promissory notes, amid what the firms describe as “growing corporate interest”.
The digital instruments were used to finance a UK food supplier importing goods into the domestic grocery market.
The transaction forms part of a £5mn facility Investec has in place for the supplier, which is expected to be fully drawn by end of July, with notes issued and redeemed on a weekly revolving basis as shipments move.
The deal saw “funding released within minutes of documentation and digital signature, with no major systems integration required”, the two companies said.
This is ETR Digital’s second-ever live WCN use case, following the UK fintech’s processing of multiple transactions using the digital instrument in partnership with Turkish manufacturer Şişecam and Isbank late last year.
Issued through ETR Digital’s Flownote platform, WCNs convert verified trade and logistics data into digital instruments that can be financed once accepted by the buyer.
The structure uses real-time logistics data that confirm the goods are in transit as the trigger for earlier payment.
Trade documents, including bills of lading, commercial invoices and transport certification, are managed through TETA, a supply chain management platform.
Once approved, the WCN is digitally created and signed, then funded by Investec Capital Solutions. At maturity, the buyer settles with Investec under agreed commercial terms, according to the company.
Further transactions are anticipated as WCN adoption “grows across UK and international supply chains”, the firms said.
ETR Digital chief executive Dominic Broom added that the fintech, which was launched last year, anticipates rolling out the solution “across mid-market businesses and private equity portfolio companies in particular”.
Investec Capital Solutions co-head Rob Harris said the structure’s flexibility means “we expect to see WCNs used right across supply chains”.
“We’ve financed this transaction on the supplier side, but the same structure works just as well for buyers who want to extend payment terms while still ensuring their suppliers are paid promptly. That dual benefit is rare.”
Harris added the technology’s “precision” allowed for “funding that responds to verified trade activity, deploys quickly, and is backed by enforceable digital assets”.
“From a financier’s perspective, that combination of speed, security and auditability is genuinely valuable.
“It allows us to support a wider range of businesses, with greater confidence, and to build long-term funding relationships rather than one-off facilities.”
Broom said the three-way structure was “central to making this model work in practice”.
“Our technology creates the instrument, TETA provides the trade documentation layer, Investec brings the capital and the commercial relationships. Together we are giving businesses on both sides of a transaction a genuinely new way to improve liquidity; one built around the way trade actually flows.”
