Invoice finance specialist MarketInvoice has taken on the high street banks with a new suite of business loans for advisers' self-employed and small business owner clients.
The firm, which has been operating an invoice finance service for six years, has expanded into unsecured business loans to help advisers whose clients may have been unable to get traditional business loans from high street banks.
Anil Stocker, co-founder and chief executive of MarketInvoice, said: “We're always looking for more ways to help businesses get the funding they need.
"There is a frustration at the rigidity of the banks' rules in terms of getting funding.
"Some people have been telling us that banks do not understand their company or the sector in which they operate.
"It can be very bureaucratic to get the funding from the bank so we wanted to build a better product and help intermediaries and ourselves deliver a better customer service."
According to Mr Stocker, the loans will be available between £10,000 and £100,000, over a 12-month term.
Although the average UK bank's rates are between 12 per cent and 20 per cent, and these loans will be between 19 per cent and 24 per cent, Mr Stocker said there were no hidden fees, or early repayment charges, unlike with the high street banks.
We have a dedicated team here that talks with advisers for both the business invoicing service and now for the business loan product.He claimed the technology underpinning the existing invoice financing service, coupled with regulations that mean banks will have to share data through application programming interfaces (APIs) to connect with other systems, means advisers' corporate clients could get a decision within days from MarketInvoice, compared with the weeks it can take for a bank to offer a loan.
Mr Stocker said the advantages for brokers were not only speed and fewer charges for their clients, but also the referral programme in operation with MarketInvoice.
He said: "Since we launched in 2011, we have worked with accountants and financial advisers and broker intermediaries and approximately 40 per cent of all our business comes through intermediaries.
"We have a dedicated team here that talks with advisers for both the business invoicing service and now for the business loan product. We have always had a referral programme, depending on the types of deal.
"So, with the loans, there will be an arrangement fee, which we will share with the financial advisers."
Business loans will be available to all UK businesses with a minimum turnover of £70,000 which has been trading for at least six months. Mr Stocker added the solution has been beta-tested over the past three months and received positive feedback from users and partners.
During this period, over £1m was advanced to UK businesses.
Earlier this year, specialist lenders entered into a 'bridging loan war', as rates were coming down in a bid to meet the demand from brokers and their clients for loans to bridge the gap between selling a home and buying another.
At the time, research showed that bridging loan activity, traditionally seen as a niche area of the mortgage market, peaked to £150m during the second quarter of 2017.
This is a 26 per cent increase on first quarter gross lending and the highest level since the quarterly Bridging Trends survey was launched in 2015 by lender MTF and several specialist finance brokers.
Reasons given by clients and brokers for the rise in bridging activity included significant delays in getting a traditional mortgage from high street lenders.
simoney.kyriakou@ft.com
