Assetz Capital, the peer-to-peer platform for secured transactions, has forged a partnership with a major US provider of invoice finance to SMEs.
The groundbreaking joint venture unites Assetz with The Interface Financial Group – one of North America’s largest SME-facing alternative funding solutions, with a presence in 9 different countries. The purpose of the 50/50 partnership is to create a new invoice finance product within the UK – one that is expected to arrive as soon as Q1 2015. In keeping with the Assetz mantra, the new product will be backed by realizable security – as well as benefiting from IFG’s proven credit underwriting process.
Unusually, investors may access the new facility with a minimum investment of just £1. Quite a departure from some of the UK’s most successful invoice financiers, upon which investors must fork up multi-thousands of pounds in order to get involved. Returns via Assetz’ new invoice finance product are expected to be 10% per annum gross yield. Investors will be able to handpick invoice funding opportunities or simply spread funds evenly across an invoice finance portfolio.
"We are building a range of credit products to suit all kinds of businesses, and also a marketplace of peer-to-peer investment products to suit all kinds of investors from retail and ISA through to hedge funds and credit funds. Invoice finance offers short-term funding for businesses, partially replacing overdraft facilities, in return for healthy, returns for investors. There is a big appetite from both businesses and investors for this managed solution.”
"Assetz Capital takes a strict stance when it comes to credit underwriting and security on its loans and all invoice finance transactions will follow the equally strict and proven IFG credit process."
"A new Invoice Finance Account will be launched which will provide strong liquidity across an asset class that as an average transaction duration of 42 days."
IFG has the feel of a very handy outfit to have tied up with. The company has just launched an online invoice finance marketplace in the US and Canada, but has been providing short-term, flexible finance for hundreds of thousands of small businesses for over 40 years. IFG’s pipeline of prospective product users should prove invaluable to the JV. Indeed, optimism surrounding the new product is such that it will quickly be made available in Ireland and other European countries.
"We've been working with thousands of businesses over the years who were unable to obtain traditional business finance facilities. The growth of IFG demonstrates this, and with Assetz Capital's peer-to-peer finance platform and our invoice finance marketplace platform with leading credit-underwriting system we are able to expand our footprint in UK and Europe so that more businesses globally can benefit from agile financial solutions. The peer-to-peer model also enables investors to gain great returns, so we're looking forward to getting started."
There is certainly an opportunity here. In spite of the success of the market leaders – MarketInvoice and Platform Black – there has been a surprising shortage of new innovators within the UK invoice finance space. Assetz is working its way towards “one stop shop” status – an online hub capable of offering multiple and diverse products to both investors and borrowers.