Hey Guys, I’m back for my second review ;)

For this one I chose Fintrux Network [FTX]

Financial Disclaimer: I did not receive any sort of payment for making this review. This is purely done out of my own interest to share my thoughts and educate people about Fintrux Network. I am invested in Fintrux personally however, so I am biased.

Let’s get right into it.

What is Fintrux Network?

Fintrux Network is a Blockchain-powered finance platform that aims to solve cash flow problems for Small and Medium sized Enterprises (SME’s). They are looking to do this through a unique reputation model of their design.

Let me sketch out the current situation to make it easier for you to understand what the issue is and why Fintrux is building a platform to solve it.

Out in the world there are plenty of entrepreneurs looking to take a shot at starting up their own business and building it out. The problem that a lot of these businesses face however, is generating revenue in the early stages. I’m sure several of you have had friends who tried starting a business but faced cash-flow issues early on, which made them shut down. Or friends who want to start a business, but simply won’t take the leap as they are not able to secure the capital for it.

Now you could say “But that’s what banks are for right? They can just take a loan there.” Wrong. Banks are simply not interested in taking the risk to give out a small-medium sized loan to a business or individual with unproven creditworthiness. Let alone if you have ever made any financial misstep in your past credit history. There’s just no way. Banks will only go for big sized loans to established companies (Why give out a 100k USD loan to a small, relatively unknown/unproven business when you can give out a 2 million USD loan to a big established enterprise) banks will always go for the lowest risk rate.

This makes it so that unless you’re already independently wealthy or manage to get some passionate investors, you’re dead in the water and there’s simply no way for you to get your business off the ground/keep it running as you do not have the financial resources to do so.

There is so much untapped potential out there because of this very reason.

Fintrux Network is going to tap into that pool of potential.

If a new business experiences Cash-flow issues early on this does not necessarily mean the business is failed/bad. It might mean they just need more time. As with many things it takes time to build out something succesful.

However, even in the early stages these businesses still need to pay their employees, invoices and bills. When the money starts running out, these businesses have nowhere to turn to as I explained earlier on. This is where the problem begins, they end up in a position where they have to choose which payment gets priority. This can cause for valuable bridges being burned and eventually results into many businesses closing books early, even though they might have turned out into a great enterprise one day if they had just been given more time/funds.

This is where Fintrux Network comes in with their Trux platform.

Fintrux is going to tackle the Cash-Flow issues these businesses are facing by using Trux to establish creditworthiness based on a number of factors outside of traditional lending considerations. Businesses on the platform are able to establish credit terms and build trust with their stakeholders via TruX’s smart contract. Fintrux is making simple unsecured loans highly secured so unexpected cash flow liquidity issues can be resolved in minutes.

This is how it works:

When an SME is experiencing a cash flow problems and needs to defer payments to stakeholders, the company can join the TruX platform. The company undergoes a comprehensive assessment and TruX generates a trust (TruX) profile, establishes its creditworthiness, and a credit limit.

That’s where the blockchain comes in. Smart credits get allocated — in the form of tokens on the blockchain — to businesses to symbolize their buying power.

Here’s a video made by Fintrux giving a visual representation of Trux:

Let’s go a into the Smart Credits, what are they?

Smart credits are basically a stable coin, a 1:1 representation of the fiat currency.

Let’s sketch a situation here on how they can be utilised:

Say a Vendor provides a service to a Client (SME) for 50k USD. However the client can’t pay the 50k USD right at that moment. So the client needs a line of credit. If the client tries to go to a bank and get a loan for this he will either get denied this loan due to banks not being keen on giving out small loans like this or the client will end up getting a loan but at a very high interest rate. It also wouldn’t make sense for a business to pay back one loan by taking another loan.

Smart credits are the solution here. The client can send Smart Credits over to the vendor, equivalent to the 50k USD that is owed. The vendor knows that these Smart credits are redeemable for the fiat currency value after a given lock-in period that both vendor and client have negotiated on together.

The vendor is also going to be earning an interest rate (agreed upon beforehand) on a month to month basis.

Because of Fintrux SME’s will be able to get a line of credit from companies that know them the best, which is their suppliers and vendors.

Interest rates through this system will be way more beneficial for the SME’s and are at the same time very interesting for the vendors too. If I told you a 12% interest rate is a good rate you’d say “bullshit that’s high AF” right? Well actually a 12% interest rate for an SME would be very fantastic. Let me give you some numbers: Most SME’s that manage to get a loan from a bank end up paying rates of up to 18–25%! And that is only if they do manage to get a loan at all which generally isn’t the case. Most SME’s end up not even getting a loan after waiting months in line to get credit and end up having to take out loans through credit cards which have an interest rate of around 35%!

More detailed information on the Trux platform can be found here in a written interview with Fintrux Co-Founder Conrad Lin:

https://www.badcredit.org/news/fintrux-networks-blockchain-finance-platform-for-smes/

In addition to Smart Credits, Fintrux introduced further product innovations to TruX: