Ripple has launched Line of Credit, a new beta service on RippleNet that allows customers using On-Demand Liquidity (ODL) to source capital on demand and initiate cross-border payments at scale using the digital asset XRP.

Limited access to working capital is one of the biggest barriers to growth for many companies, the company pointed out. Unlike incumbents who have large balance sheets that allow them to scale their business quickly, many FinTech startups and small and medium-sized enterprises (SMEs) lack the capital and resources to compete.

Ripple’s Line of Credit aims to solve this problem by providing upfront access to capital for every market through one simple credit arrangement.

Those using ODL on RippleNet can purchase XRP from Ripple on credit. Customers are charged once on the amount borrowed, with no hidden fees, and can receive approvals faster than through traditional means.

Line of Credit has already been piloted by RippleNet customers which specialise in cross-border money transfers.

By leveraging distributed ledger technology (DLT) and XRP, Ripple stated that Line of Credit is the latest step in its vision to break down barriers in finance.

Line of Credit is currently only for use by eligible institutional RippleNet customers, not the general public. It is treated as a form of payment to finance a purchase of XRP, and is not a lease or loan of XRP for tax purposes.

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