Fintech lender surpasses “record” £3.5bn funding to support business customers

Fintech lender Sonovate has surpassed £3.5bn in total funding and £1bn in annual funding for the first time as rising costs force businesses to seek finance to manage cashflow and drive growth.

During 2022, London and Cardiff based Sonovate provided businesses with £1.1bn in finance, a 58 per cent increase on the £700m lent in the previous year, and more than double 2020’s figure of £444m . Lending hit £312m in Q4 2022 alone, up 30 per cent from the same period in 2021.

Last year also marked the first time the amount of funding provided in a month surpassed £100m, with Sonovate initially hitting this sum in October, then again in November when £110m was loaned to businesses. This high was a 22 per cent jump on the previous highest performing month, when £90m was provided to businesses.

Sonovate’s “record” performance was driven in large part by the expanding adoption of its business finance and technology services by consultancies, recruitment agencies and labour marketplaces throughout the world to allow them to pay contractors on time.

The increase in finance deployed to businesses was made possible by the securitisation deal with BNP Paribas and M&G Investments that Sonovate completed in Q3 2022. This deal added £165m to Sonovate’s funding structure, increasing its capital efficiency and expanding its customer base, especially in the enterprise space.

The volume of funding provided to customers over the course of 2022 increased by 50 per cent year-on-year as adoption of embedded finance models gained momentum. Meanwhile, enterprise customers receive approximately one third of Sonovate’s total lending volume.

This significant increase in volume demonstrates the continued growth in the use of contract and freelance labour, and indicates the market potential in the years ahead.

Richard Prime, co-founder & CEO of Sonovate, commented: “Rising costs have presented many challenges, but ambitious businesses are embracing the opportunities to drive growth and increase their competitiveness by securing finance to invest in their workforce.

“With workers demanding new ways of working in response to both the pandemic and the cost of living crisis, and businesses looking to reduce costs where possible, more and more companies are building their teams around a contract-based workforce.

“Businesses benefit from this approach as they’re more agile to adapt to changing workload or cashflow and, as this trend continues, the need for on-demand funding will continue to soar.”

By Matthew Neville – Senior Correspondent, Bdaily

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