Ripple, the payments startup with a multibillion-dollar valuation, an IPO in the cards and a complex relationship with the XRP cryptocurrency, is branching out into the lending business.

  • On Friday, the Silicon Valley-based fintech unveiled its Line of Credit for customers using its On-Demand Liquidity (ODL) service, per a company blog post.
  • "This is our first time testing a product offering in the lending space," a company spokesperson confirmed to CoinDesk. "We may decide to build out a more robust offering in the future."
  • According to Ripple, the credit line will enable small to medium enterprises to expand their business where they would otherwise face "stalled growth," inhibiting their ability to compete with larger companies.
  • Those companies using ODL on RippleNet, a network of payment providers, will be able to buy XRP from Ripple on credit and will be charged a fee on the amount borrowed.
  • The service is designed to facilitate lower-cost financing for cross-border payments compared to traditional means and has been trialed by RippleNet customers via a pilot program, the company said.
  • ODL uses XRP as a "bridge currency" to facilitate cross-border payments. For example, a Canadian business that needs to pay a supplier in Israel but can't find a foreign exchange dealer willing to exchange loonies for shekels can instead convert the money into and out of XRP, quick snap.
  • In that same example, the credit line means that the Canadian firm doesn't have to front the money – it locks in a rate at the time of payment and then repays Ripple "when it’s convenient," the company says.
  • Ripple holds 6.2 billion XRP (worth about $1.55 billion at current prices). Its stash accounts for 6% of the total XRP supply when counting both the 45 billion in circulation and 48.6 billion in escrow. The company periodically sells XRP into the market.

See also: Ripple Chairman Says Firm Could Leave US if Regulatory Environment Doesn’t Change

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