January/February 2018

Digitalizing ABL Loans and Liquidity: InterNex Capital Marries Technology with Tradition

InterNex Capital was founded by a group of former GE Capital executives and fintech entrepreneurs to bring digitized asset-based lending to the lower mid-market. InterNex Capital brings a “bankable” working capital financing product to small and mid-sized businesses with $1 million to $50 million in revenue. InterNex has blended traditional asset-based lending with new technology.



Lin Chua, COO, InterNex Capital

Lin Chua, COO, InterNex Capital

People may grouse about trash-talk on Twitter or people being glued to their screens, but no one doubts that technology has transformed almost every aspect of our lives in positive ways over the past two decades.

InterNex Capital Co-Founders Lin Chua, COO, and Paul DeDomenico, CEO, both former GE Capital executives, recognized the opportunity to bring technology to ABL. Together with Co-Founders Jim Miller, CTO, and Simon Hermiz, managing director of Risk and Operations — both serial entrepreneurs — the group began examining ways to apply technology to lending in the lower mid-market.

“We were looking at exponential growth in fintech, with most lenders focusing on the consumer space, student lending and micro businesses to provide loans under $100,000,” Chua recalls. “Yet small and midsized businesses were struggling to find working capital in a banking environment that had undergone massive consolidation and faced increased regulation in the wake of the financial crisis.”

The group began planning to launch a fintech in this space, using new tools that were quickly developing every day.

“Paul and I pressed the button after numerous conversations, glasses of wine, with a plan scribbled, of course, on a napkin,” Chua, who comes from a family of entrepreneurs, says.

She and DeDomenico already had a taste of building businesses together, having spent nearly a decade launching and growing GE Capital’s global trade finance business.

That’s how InterNex Capital was born. After inking a strategic partnership with Genpact, InterNex spent the bulk of 2015 and 2016 building its technology, infrastructure and human capital.

InterNex successfully raised equity from private investors and family offices in 2016 and secured up to $100 million in debt financing from 400 Capital Management, a structured credit fund. “With our version of ‘iPhone One’ and financing in hand, we cut the ribbon and opened InterNex Capital’s doors for business in 2017,” Chua recalls.

Traditional ABL and Technology

InterNex combines a digital underwriting system with the eyes of financial services veterans to close transactions in four to seven business days (from first client contact to funding date). The company offers $250,000 to $10 million asset-based revolving lines of credit secured over accounts receivables to businesses with revenues from $1 million to $50 million. Chua emphasizes this is a true ABL product, right down to the portfolio monitoring practices that combine technology and analytics, with “tried and tested” methodologies. In short, InterNex has found a way to marry traditional ABL with advanced technology that provides lightning transaction speed and a frictionless client experience.

InterNex chose to avoid mid-market lending and the more crowded space of micro-loans (under $100,000) or unsecured or second-lien loans offered by many fintech small business lenders. The company’s sweet spot is providing significant revolving working capital lines of credit to companies starved for day-to-day capital — and delivering tools to monitor their liquidity.
“We do not just seek to fund businesses,” Chua says. “We want to be their true partners and believe in the importance of being responsible lenders.”

Technology is a two-way street for InterNex. Algorithms, analytics and system integrations allow InterNex to lead the way with a superior user journey, expedited underwriting and portfolio monitoring. At the same time, technology also enhances risk mitigation through data transparency.

“This is a revolutionary platform. We look to combine artificial intelligence with the sensible use of the experience of our industry veterans on all transactions,” Chua explains. “For borrowers, we provide a frictionless online experience that enables them to monitor the status of their daily working capital, draw on their InterNex line and receive funding the same business day.”

In November, InterNex launched its Velocity platform. Using the company’s online portal, Velocity provides borrowers with on-demand liquidity through lines of credit and delivers real-time access for working capital management. Velocity empowers companies to accelerate growth and provides powerful analytics traditionally available only to large enterprises.

Through Velocity, clients have access to lines of credit and additional business intelligence features that can be customized. This includes business insights through data visualization, cash management and automated reporting and integration with accounting systems to simplify daily operations.

“It’s real time cash management. We provide white-glove customer service. Clients can speak to a live account manager during business hours and can continue to manage their accounts online at all other times 24/7,” Chua says. “Velocity refreshes every 15 minutes so clients have the most up-to-date information. We strive for Velocity to become the ‘virtual CFO’ of our clients.”
InterNex plans to more than double its new business volume in 2018 through innovation and new products. The focus will continue around enhancing “one tap access” for clients, which highlights more transparency and expedites document collections. Increasing artificial intelligence and integrations will be built into InterNex’s products and platforms in a way that enhances user experience.

“The second generation of our technology directly impacts origination,” Chua says. “As new technologies arrive on the horizon, we will always look to ‘marry the old to the new.’”

Meet the Co-Founders

The “secret sauce” to InterNex’ success is the combination of traditional ABL experience and high-tech knowledge that the founding partners bring to the table.

Chua, one of a growing number of women entering the finance industry, has more than 20 years of global experience. Prior to launching InterNex, she was man-aging director at GE Capital, where she held various senior leadership roles over the course of a decade and received multiple awards for growth. A lawyer by training, Chua served as a transactional attorney at De Brauw (Netherlands), Simpson Thacher (New York) and Freehills (Australia), representing private equity funds on M&A, capital markets and structured finance matters. Chua, who was born and raised in Singapore and speaks five languages, has lived in four countries and worked on three continents.

DeDomenico is an entrepreneurial financial ser-vices executive and global business leader with experience building and growing new lending platforms to serve small businesses and corporate enterprises. Prior to launching InterNex, DeDomenico was head of Global Corporate Receivables Programs at the New York Stock Exchange. DeDomenico joined NYSE from GE Capital in September 2011, where he built a track record growing new business platforms and delivering working capital financing solutions to SMBs and global corporate clients.

Hermiz, managing director of Risk, is a BNY/Fifth Third Bank-trained credit executive with experience in the fintech space. Hermiz was a key player in the initial development and build of InterNex’s credit scoring and data analytics capabilities.

Technologist Miller, the fourth co-founder, is a fintech maven. He has been a financial technology builder for the better part of his career, including as co-founder and CTO of CreditEX and subsequently of TrueE.

Together, the team is melding the old with the new as technology continues to change the complexion of the asset-based lending industry.