CEO of MarketFinance: “Single Click” SME Lending.

Ordering food. Download Uber. Booking a flight.

In this age of convenience and instant gratification, any consumer who performs these activities can expect to complete them with just a few clicks on their phone.

“The same thing happens with finances and [among] business owners who have moved their Internet business to the aftermath of the pandemic “, Anil Stokerco-founder and CEO of FinTech based in London MarketFinance, he said in an interview with PYMNTS. “[They] they now expect a similar level of service in their business requirements as in their consumer applications “.

For the UK’s B2B Small and Medium Business (SMBs) lending company, this means doubling investments in technology and credit models to meet growing demand for faster implementation and approval procedures. loan.

“[It’s] “Basically without friction funding, that has been our goal for a long time,” Stocker said, adding that they have set up their own systems to ensure that people can make a decision in less than 24 hours after applying for a loan.

And boosting their systems seems to have served the B2B lender well, equipping the company to handle the tenfold increase in loan applications at the height of the pandemic – from 30 million a month before the pandemic to about 300-400 million – and leading to a 133% increase in revenue in 2021, the same year the company reached profitability since its inception in 2011.

Related news: Tenfold increase in lending drives UK B2B lender market to profit

With this increase in demand for friction-free financing and quick access to funds, Stocker said they are approving more unsecured loans as more companies move away from the longer, more complicated lending process over their invoices or future earnings.

Read more: UK’s FinTech MarketFinance raises $ 382 million in debt, equity

And while this may be a riskier choice for any lender, he argued that it makes sense, as it is often the “best companies” that expect a friction-free experience, and the more obstacles you put in, the better off [ones] and end up with desperate people. “

Read also: MarketFinance facilitates the financing of small and medium-sized enterprises with new opportunities

It acknowledged, however, the need to invest more in technology and sophisticated models to minimize higher risks. “You have to manage the risk differently [in the unsecured market] but it’s a good challenge and a good discipline to try to create these very elegant interfaces. “

Embedded Finance unlocks direct borrowing

According to Stocker, the transition from bank-controlled offline lending to online applications has spurred the first wave of FinTech lending, leading to the current decentralization of finance – a pandemic trend involving the integration of financial services into applications, websites or ecosystems.

“It simply came to our notice then [with] such as Klarna or Afterpay integration with retailers [apps and sites] and offer credit at the point of the transaction. The same thing is happening now in B2B [space]”, Stocker observed, adding that the trend will” change completely [finance] landscape ”in the next decade.

MarketFinance is taking advantage of this opportunity with MarketPay product, which integrates payment and credit options in electronic cash registers, allowing suppliers to receive immediate payment on the first day of purchase, while buyers have up to 90 days to repay the loan to MarketFinance at zero cost to them.

As Stocker said, embedded financing “is the direction of travel [we’re taking] – is instant, with one click and unlocks [lending] with the fewest clicks. “

Shifting business models

To date, the UK lender has lent more than $ 3 billion to small businesses to finance working capital products, such as invoice financing and flexible lending, to longer-term loans for larger markets such as capital expenditures, for example.

And as they plan to continue to help profitable businesses that have viable business models, Stocker said they will take into account the unintended changes in business models caused by the pandemic.

He mentioned a customer who was supplying coffee to offices and cafes across London before the pandemic and had to turn to delivery directly to people’s homes after it all closed.

This change, which required a change in logistics, warehousing and customization of the marketing campaign to consumers, cost F 250,000 (approximately $ 326,500) provided by MarketFinance to support the coffee business.

“We saw a lot of good companies that were reasonable to collect some cash, to rethink their business model [and] “how could they adapt their businesses?”

And with the ongoing war in Ukraine, the lockdown in China and the shocks in the supply chain, as well as rising inflation and interest rates, he said the uncertainty caused by these events in the macro level is an indication that UK small businesses will not slow down any time soon.

The UK lender is also aiming to expand internationally to serve small and medium-sized businesses outside the UK – a plan they plan to pursue by identifying major trade corridors, leveraging the payment infrastructure they are developing to help businesses buy and sell internationally. capitalize on key integrated financing partnerships.

“Over time, you will see more lending companies succeeding in their international expansion and we are definitely looking forward to this next phase as well,” Stocker said.

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NEW PYMNTS DATA: INNOVATION STUDY THE FUTURE OF BUSINESS PAYABLES – APRIL 2022

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About: While more than half of SMEs believe that an all-in-one payment platform can save them time and improve cash flow visibility, 56% believe the solution can be difficult to integrate with existing AP systems and AR. The Future Of Business Payables Innovation Report, a partnership between PYMNTS and Plastiq, surveyed 500 small and medium-sized businesses with revenues between $ 500,000 and $ 100 million to explore how all-in-one solutions can exceed small and medium-sized enterprise expectations and help their businesses to be resilient in the future.

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