What many small businesses are unaware of is the sheer range of fintech services already available, that are specifically designed to offer SMEs exactly the kinds of financial protection and insights that they need right now, on a mass digitised scale – and all without having to go near a bank branch.

I’ve worked as a technology lawyer in the fintech sector since before it was called 'fintech', and in all that time I’ve never seen a clearer use case for many of the ingenious services that are out there.

However, they are not as well-known or used as they should be amongst the UK’s vast population of small businesses. So, we’ve collated below some of the best ones we know of that are perfectly positioned to help SMEs survive the current downturn – alongside the laudable initiatives that the government is putting in place – and to bounce back after it, in the hope that the message gets to the right people and that SMEs will use these services to their advantage. 

If you’re reading this and know anyone who runs a small business – of any kind – and think they would benefit from any of the below, then please send this on to them.

We’ve split the services up into categories, and given a brief description of each.

Surviving the economic dip

Funding for working capital

Many small businesses will go straight to one of the major banks for a loan if they need funding – which at present is obviously difficult.

Instead, they could look at:

• iwoca – (which stands for “instant working capital”), a digital platform which provides loans of between £1K and £200K, for up to 12 months, and does so on the basis of a fully digitised decision-making process. They have been up and running for about 7 years, have an established track record, and are bringing in various initiatives around COVID-19
• Funding Circle – is another option in this space, another digital platform which provides loans of between £10K and £1m, for up to 5 years, but does so on a peer-to-peer system where individuals and institutional investors lend to small businesses. They also have a great track record, and have produced a number of useful resources around COVID-19.
• Market Finance – offers loans of up £250 for up to 3 years, and again using a digital platform to make the whole process slick and smooth.
• Funding Options – is a lending marketplace with wider array of loans on offer, and is a good place to shop around for different types of finance.

Trade credit insurance

• Nimbla – provides single invoice insurance to SMEs, meaning that, if a small business issues an invoice to a customer but is worried that it might not get paid, they can take out a small insurance policy to cover the bad debt. Nimbla have created a technology platform to allow them to underwrite this risk on an almost fully automated basis, and have direct connections into a number of the online accounting packages (e.g. Xero), so the process is quick and cheap relative to the business impact of invoices going unpaid.

Invoice factoring / invoice finance

• Market Finance (again) – also provides invoice factoring / invoice finance, whereby a business can essentially “sell” its invoices to Market Finance, to release cash from invoices quickly for a small fee, such that Market Finance pays the SME and then owns the invoices and chases the debt. This can be done on either a one-off or a subscription basis.
• Funding Options (again) – is also a useful port of call for invoice financing.

Cashflow prediction

• Fluidly– is an online AI-based cashflow forecasting platform, which takes transaction data from any small businesses and analyses it to work out when that business is likely to be needing some kind of cashflow boost, or just to help the business avoid such issues in the first place. They are also connected to some of the major accounting software packages, so getting the data into the platform involves minimal admin, and it can be used alongside existing accountants.

Thriving after the dip is over

There are also lots of services available which can help SMEs to manage their money and drive traffic to their businesses. A number of the services below are geared more towards retail, but many would work well for any small business.

Accounting and bill payment – time saving

• Xero / Pay with TransferWise – Xero is one of the major accounting software packages, which can link directly into an SME’s bank accounts to pull information into the ledgers automatically rather than having to use spreadsheets. This on its own saves business owners a large amount of time, but recently Xero have also introduced a feature (via a partnership with TransferWise) through which customers can pay bills directly through the Xero platform, rather than having to take the information from Xero and log into a separate platform in order to make payment.

Loyalty – driving traffic

• Reloyalty – is an app which allows consumers to link their payment cards to the app and receive automatic cashback payments from participating retailers as a reward for making qualifying transactions as part of the loyalty schemes designed and operated by each retailer. This means that customers can participate in loyalty schemes without having to collect loyalty stamps or dig out physical store cards each time they pay. From a retailer perspective, the benefit is access to quality user engagement data and the ability to target and reward loyal customers to incentivise repeat business.

Digital receipts – data insights for retailers

• Flux – provides digital receipts for physical point of sale transactions without any further step by the customer, which are then displayed in the customer’s banking app. This means that as a retailer you can save paper wastage by removing the need for physical receipts, and can get anonymised data about customers’ spending habits that can help you market effectively.

Currency hedging – minimising currency fluctuation risk if you operate internationally

• Assure Hedge – this startup provides FCA-regulated exchange hedging technology services, specialising in foreign exchange options, forwards and other regulated hedging instruments, that help small businesses hedge their risk of currency fluctuations in a way that has previously only been available to major multinational companies.

Incentivising early payment

• Peasy – is a startup that provides a mechanism for small businesses to get paid quicker by their customers by creating a service that incentivises customers to pay early by giving them Avios points if they do, which are paid for by the supplier company at a much lower cost than the cost of obtaining credit.

These are just some of the services that are out there, you can find more from us here – innovations of this type have never been more important, and I would urge you to forward this on to anyone you think may be able to benefit from them.