The London-based fintech’s AI-driven app pinpoints the future cashflow shortfalls businesses often miss and presents suitable funding solutions from an array of lenders in minutes.

The new service responds to Fluidly’s data analysis of 19,799 small businesses that shows more and more dipping into their overdrafts. Close to one in five small businesses now have no cash in the bank, with the number having to use their overdraft rising from 13.9% in March 2019 to 17.8% in January 2020.

The impact of late payments, economic uncertainty and Brexit appears to be taking its toll, with the number of businesses going into their overdraft rising in nine of the 11 months tracked, and fastest between December 2019 and January 2020. 

Worst hit regionally were Plymouth (35.7%), Southampton (34.3%) and Peterborough (32.8%) where around a third of businesses have had to resort to their overdraft to survive. Food and drink makers (34.7%), product manufacturers (33.3%), and farmers (32.6%), have fared least well over the period, suggesting that those that invest large amounts up front are struggling badly.

Caroline Plumb OBE, Founder and CEO of Fluidly, said: “For the first time, this unique data gives us a true picture of how tough it has been in the last year for small businesses to have cash in the bank when they need it and to look ahead with confidence. With so many resorting to their overdrafts the demand for funding solutions when businesses need it most is only increasing. 

“Business owners are no doubt being caused sleepless nights by concerns around making payroll, paying suppliers or tax bills, and chasing late payments, let alone whether they can invest in growth. We identified a real need to provide businesses with data to spot cashflow challenges and the funding solutions they’ll require, with enough time to access them. 

“An estimated 50,000 businesses go under each year due to late payments, costing the economy £2.5bn. How many of these ‘failures’ are avoidable? If the rising number of businesses with no cash in the bank goes unchecked, tens of thousands more will go under.” 

Federation of Small Businesses (FSB) research last month found that a growing proportion of finance applications (37%) are being driven by cashflow concerns, but 40% of business owners perceived that funding options available to them are ‘unaffordable’. 

The FSB also found that the share of small business finance applications that were approved fell in the Q4 of 2019 from 71% to 63%. This is set against a backdrop of more than £20bn of late payments being outstanding, putting huge pressure on small businesses, who spend an estimated 1,300 hours a year chasing debt.

Fluidly’s app, which is free to search and integrates with cloud accounting packages including Xero and Intuit QuickBooks, is designed to help small businesses that typically reach a cashflow crunch and act in haste, perhaps securing the wrong type of financial product at the wrong price. 

Instead, by identifying when companies will need extra cash in the bank, Fluidly matches businesses with relevant products from a carefully curated range of financial providers within two minutes. Fluidly is working with leading lenders, to ensure businesses are presented with competitive options for their financing needs.

Caroline Plumb OBE, added: “When I ran my first business, not knowing what the future of my business’ finances looked like was incredibly stressful. Now, with Fluidly, business owners can look ahead to plan with confidence, get cash in the bank for growth and trading, and do so in the most effortless way possible.”

Available to both businesses and accountants, the new service, which is easy to use and fully regulated by the Financial Conduct Authority (FCA), will allow businesses to secure offers from lenders in just two days, ensuring they make considered decisions. Carrying out a no-obligation, free of charge, search for funding options has no impact on business’ credit ratings.

The platform will be open to any business looking for funding, whether it’s to grow through new opportunities, boost capacity with more equipment or stock, expand into a new space, make hires, take money out of the business, or simply get some help through a rough patch.