By Julie Steinberg and Duncan Mavin

Greensill Capital used Credit Suisse Group AG's now-curtailed supply-chain funds to make a $350 million loan to one of the startup's biggest outside backers, private-equity firm General Atlantic, according to loan documents reviewed by The Wall Street Journal and people familiar with the matter.

The previously unreported loan would be the second example of Greensill lending money to one of its part owners. Last year, executives at Credit Suisse launched a review of the funds it manages with Greensill after becoming concerned about the financial startup's biggest investor, SoftBank Group Corp., which also benefited from Greensill loans, the Journal previously reported.

Greensill was founded in 2011 by former Morgan Stanley and Citigroup Inc. banker Lex Greensill. It plunged into crisis on Monday when Credit Suisse froze $10 billion in investment funds that Greensill relies upon to do supply-chain finance deals, a form of short-term cash advance for companies. The Swiss bank said Friday it would liquidate the funds.

Greensill plans to file for insolvency in the coming days in the U.K. and is in talks to sell its operating business to Apollo Global Management Inc., according to people familiar with the matter. The sale would be for a fraction of its peak valuation, which was $4 billion in 2019.

The financial startup made the euro-denominated loan in 2019 to General Atlantic, which is the second-largest outside investor after SoftBank's Vision Fund. General Atlantic used the loan to fund the acquisition of shares in a joint venture with German exchange operator Deutsche Börse AG, according to the loans documents and the people familiar with the matter.

Recent disclosures Credit Suisse made to its fund investors and reviewed by the Journal didn't mention transactions with General Atlantic. A January 2021 fund document lists a roughly $95 million supply-chain-finance transaction with Deutsche Börse, General Atlantic's joint venture partner.

Banking regulators set limits on lending to a bank's top owners to prevent conflicts of interest. In Greensill's case, some of the loan was made from its German banking unit, according to the loan documents. Regulators said this week that they froze the bank's operations.

Other parts of the loan were repackaged into securities and sold to one of the Credit Suisse supply-chain funds.

The General Atlantic loan "provides Greensill with the opportunity to strengthen its relationship with a significant sponsor whilst achieving a strong return," the internal Greensill loan documents say. A sponsor is financial jargon for an investor.

General Atlantic invested $250 million in Greensill in 2018. It had a roughly 15% stake at the time of the loan, according to one of the people familiar with the matter. It currently owns roughly 7%, the person said.

Founded in 1980, General Atlantic has $53 billion in assets and offices around the world. The firm is known for taking stakes in fast-growing technology companies, such as Alibaba Group Holding Ltd., before they go public.

In SoftBank's case, its role in the Credit Suisse funds was larger than previously known. In March last year, as fears about Covid-19 hit markets, investors yanked their money from the Credit Suisse funds, sapping Greensill of a key source of off-balance-sheet financing.

Mr. Greensill, the company's founder, placed a call to SoftBank Chief Executive Officer Masayoshi Son for help, according to people familiar with Greensill's relationship with SoftBank. The Japanese billionaire agreed to have SoftBank put $1.5 billion into the funds, according to the people. That number is higher than the $700 million the Journal reported last year.

That money was separate from the $1.5 billion investment SoftBank's Vision Fund made directly in Greensill in 2019.

By the end of March, four Vision Fund companies were among the top 10 recipients of financing from the Credit Suisse funds, receiving about $750 million in aggregate, according to a fund document sent to investors.

The Vision Fund companies were auto-financing company Fair Financial Corp.; Indian hotel chain Oyo Hotels & Homes; glass manufacturer View Inc.; and Chinese online car-trading platform Chehaoduo Group.

In essence, SoftBank was a Greensill part owner, a lender to it through the Credit Suisse funds and a borrower through its Vision Fund companies. The multiple roles sparked the review inside Credit Suisse, the Journal reported last year.

SoftBank redeemed its position in the funds by July last year, and Credit Suisse committed to changes to the funds that would protect investors. The bank wrote to investors to disclose that about 15% of the notes in the funds were tied to companies in the SoftBank Vision Fund, according to a letter viewed by the Journal.

In December, the Journal reported that Greensill canceled a $435 million loan it made to another Vision Fund company, construction startup Katerra. At the time, Katerra received a $200 million bailout from SoftBank that helped it stave off bankruptcy.

Write to Julie Steinberg at julie.steinberg@wsj.com and Duncan Mavin at duncan.mavin@wsj.com

(END) Dow Jones Newswires

03-05-21 1730ET