MarketFinance banks £50m as it ramps CBILS support for SMEs
Fintech business lender, MarketFinance has secured an additional £50m from one of Israel’s largest asset managers, Viola Credit, to lend to UK SMEs under the HM Treasury and British Business Bank CBILS initiative. The announcement comes as MarketFinance launches a 'unified application' process in which SMEs will, through one application, be presented with a variety of finance options and be able to select those best suited to their needs.
MarketFinance is now able to offer a combination of business loans, invoice finance and revolving credit facilities through this single application journey.
Funding line to support CBILS
The CBILS initiative will conclude at the end of September 2020 with pre-submitted applications in September being valid until the end of November.
In readiness to service the last minute dash for CBILS loans or revolving credit facilities, MarketFinance has secured this additional funding of £50m to support SMEs with their working capital at this crucial time. Since 2011, Institutional investors such as banks, asset managers and family offices have provided the majority (70%) of capital that MarketFinance lends out to businesses.
Anil Stocker, CEO at MarketFinance, commented: “Only 60,409 CBILS facilities have been approved since the pandemic started, versus 1.2m Bounce Back Loan approvals. This shows there are many businesses who could still benefit from accessing CBILS finance before the scheme ends.
"For many who took a Bounce Back Loan, there is now a short window where they can refinance onto a larger CBILS facility which could see them over to the new year. Vast swathes of the UK SME community haven’t applied or remain unaware of the CBILS initiative and that it concludes in a few weeks. By lining up this additional funding, we want to send a strong signal to the market that MarketFinance is here to help”.
One application, many options
Alongside the fundraising, MarketFinance has rapidly improved its unified application process to allow faster decisions and access to the right funding for SME applicants. This means, for the first time, businesses will make a single universal application for finance and will be able to see, learn more about and select which option (or combination of options) is right for them. This will allow SMEs to draw down a loan today, but also set them up to use invoice finance or a revolving credit facility for when their order book fills back up.
Through collecting just a few pieces of information about the applying company, MarketFinance is able to make instant decisions on 45% of applications with their automated decision engine, 'Autoflow'. Their proprietary risk model, 'Selector', can assess each applicant under pre-COVID conditions, which means funding decisions are not overly biased by these unprecedented and potentially temporary conditions. This gives applying SMEs a greater opportunity to be approved compared with other financiers whose models are run only against today’s conditions.
This year MarketFinance added business loans and revolving credit facilities to a product suite including selective invoice finance, contract finance and confidential whole-ledger invoice finance. Businesses are able to access a combination of these simultaneously from MarketFinance, making it the first fintech funder to offer multiple products within a single platform.
Stocker added: “Since launching CBILS loans, we’re already lending out around £10m per month and our product development in invoice finance means we’re getting funds out 40% faster than 6 months ago. We’re constantly working on how we can reduce the time to funding for our new applicants and existing users. CBILS has only accelerated the pace at which we’re investing in our various products. The MarketFinance vision is to make finance available, easy-to-use and fairly priced to viable small businesses that need it most.”
MarketFinance is accredited to lend under the Coronavirus Business Interruption Loan Scheme (CBILS), providing term loans from £50,001 to £150,000 and revolving credit facilities from £50,001 to £5m to UK SMEs.
SME business owner, Miguel Gibson, MD at Tour Operator Live Holidays commented: “As soon as the lockdown hit, our first priority was to refund our customers. In the meanwhile we were waiting for airlines to pay us back. The banks were slow to support with CBILS but MarketFinance understood our business quickly and provided a £150,000 CBILS loan in days. It meant there was no extra pressure on the business. We’re a £7m turnover business and this loan has helped to navigate an unprecedented time.”
Stocker added: “We make finance easier for business owners. Over the years we’ve refined our platform, allowing integrations with banks, online accountancy packages and credit bureaus to make lending a seamless process. This has saved time for owners and allowed them to focus more energy on the running of their business.”
MarketFinance business highlights (2019/20):
- Updated brand name from MarketInvoice to MarketFinance to reflect launch of multi-product offering
- Secured £56m Series B round (debt and equity funding), attracting new investors Barclays and Santander. Strengthened leadership team with a new CFO, CRO and CTO.
- Accredited as a CBILS lender for term loans and revolving credit facilities
- In response to COVID-19 impact, launched a Furlough Advance product to ease cash flow pressure on businesses as they wait to be paid from HMRC