Member Article

Peer-to-peer funder unlocking SME finance bottleneck

Business finance provider MarketInvoice is set to transform the North West lending landscape with the opening of a Manchester office to give small businesses quicker and easier access to working capital.

The peer-to-peer funder enables businesses to selectively sell their invoices to a network of global investors, releasing money up front that would otherwise be tied up for up to 120 days.

Since its London launch in 2011, invoices worth nearly £250m have been traded and the company has secured the support of the Department for Business Innovation and Skills (BIS).

The new Manchester office, in Chancery Place, Brown Street, Manchester, will support businesses across the North West and beyond.

Anil Stocker, chief executive and co-founder of MarketInvoice, said: “We enable companies to secure the investment that can lead to hiring new staff, taking on new projects, and buying new equipment.

“Unlike banks, we don’t need businesses to sign lengthy contracts with opaque fees, we don’t take more than 24 hours to approve applications, and we don’t need to take debentures or personal guarantees.

“Businesses in the North West are facing a perfect storm of long payment terms from large corporate customers and a lack of available finance from the banks.

“Even when businesses are successful in applying for finance, the process can take weeks and will usually see a bank take significant security over your business or personal assets. This is turning businesses off using finance to capitalise on growth opportunities. We’re here to change that.

“It’s a new approach to funding that is part of a broader alternative finance movement. Thousands of exciting British companies have been taking advantage of new finance opportunities in recent years; businesses in the North West shouldn’t be missing out.”

Chris Lever operated successful but small book binding company Bindatex for many years until discovering in 2012 that his binding processes could be applied to other industries, such as aerospace technology and defence.

The Bolton-based business was dramatically transformed with a series of big new contracts. Fulfilling the new contracts without access to working capital would have held the business back from its new opportunities. Mr Lever used MarketInvoice to raise the working capital needed to pursue growth.

He said: “The peer-to-peer funding meant we could expand into new sectors. MarketInvoice helped plan and ease our cash flow, selling invoices as and when we needed to.”

MarketInvoice’s Manchester office will be headed by Benjamin Day, 29, who will be responsible for sales across the North.

Mr Day, who lives in Altrincham and has lived in Greater Manchester all his life, previously worked for a traditional invoice factoring company and is an expert in the local business landscape.

He said: “Businesses in the North West are ready for new opportunities and don’t want to wait around for the banks to catch up with them. Business finance is changing.

“Business owners are beginning to see they don’t need to wait around for weeks on end to agree funding, they don’t need to sign debentures or personal guarantees, and they don’t need to agree long contracts with hidden fees. Finance can be much more simple.”

MarketInvoice will have seven permanent staff in Manchester by the end of the year, with around 50 staff across the Manchester and London offices.

The latest Bank Of England Trends in Lending quarterly report (July 2014) reveals that the annual rate of growth in the stock of lending to both small and medium-sized enterprises remained negative at -0.7 per cent (Q2 2014). Over the same period MarketInvoice grew its lending by 400 per cent.

This was posted in Bdaily's Members' News section by Simon Malia .