Private credit,
explained.
A plain-language guide to private credit tokenization — what it is, the problem it solves, how Modivis works, and what it means for your business.
The Basics
What is private credit?
Private credit is any form of lending or financing that happens outside traditional public markets — think bank loans, but between businesses and non-bank lenders. It includes a wide range of instruments: invoices that businesses are waiting to be paid, letters of credit used in international trade, and net working capital facilities that help companies manage day-to-day cash flow.
For most businesses, especially small and medium enterprises, accessing private credit is slow, expensive, and opaque. You have to deal with lengthy approval processes, high fees, and limited transparency on pricing.
Think of it this way: you've delivered a product or service. You've issued the invoice. But you won't get paid for another sixty or ninety days. You need cash now — and the traditional options are costly.
The Problem
Why traditional private credit financing is broken.
The global private credit market is enormous, yet the infrastructure powering it is decades old. Businesses that need liquidity are forced into a system built around intermediaries — banks, factors, and brokers — each of whom takes a cut and adds delay.
Slow approval processes
Traditional factoring and credit facilities can take days or weeks to approve, leaving businesses without the cash they need to operate.
High financing costs
Debt factoring rates are significantly higher than what investors expect in return, meaning businesses overpay to access their own receivables.
Lack of transparency
Pricing is opaque. Businesses rarely know if they are getting a fair rate, and investors have limited visibility into underlying assets.
Geographic barriers
Access to capital is uneven. Small businesses in emerging markets face even higher costs and less access than their counterparts in developed economies.
The Solution
How tokenization changes everything.
Tokenization means representing a real-world financial asset — like an invoice or a letter of credit — as a digital token on a blockchain. Once tokenized, that asset can be divided into fractional pieces, listed on a marketplace, and funded by investors from anywhere in the world.
The blockchain provides an immutable record of every transaction. Funds are held in smart contract escrow rather than by a third-party intermediary. Settlement is near-instant. And pricing is transparent — driven by market supply and demand rather than opaque bilateral negotiation.
Instead of paying a factoring company to buy your invoice at a steep discount, you list it on the Modivis marketplace. Investors compete to fund it. You get cash faster at a better rate. Everyone wins.
How It Works
The Modivis process, step by step.
Modivis provides the full technology stack — from asset verification through to final settlement. Here is how the process works for a business looking to tokenize an invoice.
- 01
Submit your instrument
Upload your invoice, letter of credit, or NWC instrument to the Modivis platform. Our team reviews the documentation and verifies its authenticity.
- 02
Escrow & on-chain registration
Once verified, the underlying asset is held in a regulated escrow account. A corresponding digital token is minted on-chain, representing a claim on that asset.
- 03
Marketplace listing
The token is listed on the Modivis marketplace. It can be divided into fractional units, allowing multiple investors to fund a single instrument and spreading risk.
- 04
Investor funding
Investors browse available instruments, assess risk and return, and fund the ones that match their criteria. Capital is transferred immediately upon matching.
- 05
Liquidity to the business
The business receives the funded capital, net of agreed fees — typically the same business day. Cash flow problem solved.
- 06
Repayment & settlement
When the underlying invoice or LC is paid by the original debtor, proceeds flow through the escrow back to investors. The smart contract handles distribution automatically.
Products
What Modivis supports today.
Modivis is built to handle the three most common forms of short-term private credit instruments used by businesses and financial institutions globally.
Invoice Tokenization
Convert accounts receivable into on-chain tokens. Businesses upload outstanding invoices and receive funding against them without waiting for the debtor to pay. Ideal for companies with reliable customers but unpredictable payment timing.
Letters of Credit
Letters of credit are guarantees issued by a bank on behalf of a buyer, assuring a seller that payment will be made. Modivis tokenizes these instruments so they can be traded and settled on-chain — removing the need for multiple correspondent banks and reducing cross-border settlement time from days to hours.
NWC Liquidity Instruments
Net working capital instruments help businesses manage the gap between paying suppliers and collecting from customers. Modivis provides a blockchain-native solution for tokenizing and financing these instruments, giving treasury teams a faster and more transparent source of liquidity.
Benefits
What this means for you.
Whether you are a business seeking liquidity or an investor seeking yield, Modivis is built to deliver a better outcome than the legacy alternatives.
For businesses
Faster access to capital
Receive funding against your receivables the same day — rather than waiting weeks for traditional approval processes.
Lower financing costs
Market-driven pricing means you benefit from competitive rates set by investors rather than fixed margins imposed by intermediaries.
No banking relationship required
Modivis is accessible to any verified business. You do not need an existing relationship with a bank or factoring company.
Full transparency
See exactly what investors are paying for your instruments. No hidden fees, no surprise deductions.
For investors
Access to a new asset class
Private credit has historically been inaccessible to most investors. Modivis opens the market through fractional tokenization.
Short duration instruments
Invoices and LCs are short-term by nature, typically resolving in days to months, giving investors predictable liquidity.
On-chain transparency
Every instrument is recorded on a public blockchain. Investors can independently verify the existence and status of assets they hold.
Automated settlement
Smart contracts handle repayment distribution automatically when the underlying asset is settled. No manual reconciliation required.
Ready to get started?
Talk to our team to learn how Modivis can unlock liquidity for your business.