- 19 Nov
Who Provides Invoice Finance To Small Startup Companies?
At the Alternative & Receivables Finance Forum, in London last week, I had the opportunity to sit in the audience prior to the panel that I was speaking on. The other panel was about "Innovative Solutions In SME Financing". SMEs are small and medium sized businesses.
Innovative Solutions In SME Financing
The discussion started with a presentation from BVA BDRC about their SME Finance Monitor, which showed some movement towards SMEs looking to borrow, but a general uncertainty and caution. This led to some discussion about the Bank Referrals Scheme, that was introduced back in 2014. This was intended to ensure that banks were obliged to pass SME customers that they couldn't help to an external broker, to maximise their chances of finding finance. Apparently the scheme has helped thousands of businesses.
Then the discussion turned to tech platform lending. In some cases the panel thought that lenders were on a steep learning curve about credit risk, and so they expected further surprises and failures within that sector. The panel commented that the lending market was generally fragmented and confused, so it's difficult for SMEs to understand. They talked about needing spaces where SMEs can learn what type of funding was best for them.
Funding Small New Startup Businesses
One speaker made the interesting point that in the UK the majority of SMEs actually make up the "S" in "SME" i.e. they are small businesses. This can include new startups, and the point was made that very often new small businesses struggle most with finding finance. It can be difficult to qualify for loans and overdrafts when you are newly formed. Most lenders want an established business that has some trading history. This prompted me to think about the number of invoice finance companies that are able to help completely new, startup companies.
Invoice Finance Companies That Fund New Startups
Sean (my business partner) and I had managed to jot down a list of half a dozen invoice finance companies, within a couple of minutes, that are able to help small new start companies, with no minimum size criteria (on checking our list of funding partners, I have found several more). These included both whole ledger, and selective invoice finance providers. So our sector actually serves this niche very well, and we have been able to help a number of new startups find business funding.
If you need help please call Sean on 03330 113622 and he will introduce you to invoice finance companies that can help small startup companies.