(Bloomberg) -- Two former Goldman Sachs Group Inc. bankers want to take the $1.6 trillion private credit revolution from Wall Street to Main Street.

George van Dorp and Koen van Vlijmen, who both worked in the American bank’s London office, have built a product that matches small businesses with alternative lenders. 

The idea behind the new platform, Fundflow, is to help democratize the industry by giving overlooked smaller companies access to a larger pool of potential lenders, including commercial banks, venture capital firms and debt funds. Lenders, meanwhile, will also get a look at far more deals that are off the beaten track.

“A lot of these businesses struggle accessing the capital markets because they lack relationships,” said van Dorp, who used to work at Goldman Sachs’ capital markets team, in an interview with Bloomberg News. “That frustrated me because I don’t think raising money should be based on relationships — it should be based on merit.”

Alternative credit has boomed over the past decade, as record-low interest rates tempted investors down the credit spectrum in search of yield. But most of the focus of private lending powerhouses such as Blackstone Inc. and Ares Management Corp., as well as the investment banks, have been on mid-sized businesses and larger. 

Private Credit Titans Are Grabbing More Than Half of New Deals

Smaller companies that don’t have well-connected private equity firms behind them have been mostly bypassed in the dealmaking blitz. That’s where the duo behind Fundflow is looking to make matches.

“The only economical way to solve that problem and make debt markets accessible to smaller businesses is through technology and building a platform where you can match lenders with businesses,” said van Dorp.

The deals Fundflow will help broker will be for as little as €1 million ($1.1 million). It will target borrowers too large for fintech lending platforms, but not large enough to pay the fees that legions of advisers and lawyers demand on larger deals. 

These fees can total 5% of the overall deal size; by comparison it costs less than 1% to transact on the Fundflow platform. 

“That’s a better way for us to add value,” said co-founder van Vlijmen, who worked in the advisory group covering TMT and industrials during his time at Goldman Sachs. 

Here’s how it works: a lender sets up its product offering, investment criteria and what type of issuers it wants to match with. A borrower provides its financial information and finds out which products it is eligible for. Then the borrower has an introductory call with Fundflow to go through the application and matches.

Lenders include Hambro Perks, a venture capital fund that recently raised a debut growth debt fund, SME Capital, targeting lower middle market firms in the UK. Another is Canada’s Flow Capital, which provides founder-friendly venture capital for companies across North America and the UK.

“Private credit is getting more competitive by the day, especially on leveraged buyout transactions,” said van Dorp. “It’s harder to find value as a credit investor, so a lot of these investors are now actively looking for non-sponsored companies where there’s less competition.”

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