New Tie Up in the SME Funding Space

By Ryan Weeks on Thursday 30 April 2015

Alternative Lending

Two alternative lenders are tying up to increase their footprint within the UK's small business community.

Peer-to-business lending platform FundingKnight has entered into a relationship with Just Cash Flow. Just Cash Flow arrived on the scene around a year ago, fielding bank overdraft alternatives in the form of 6 different lending products. Since then the lender has built a loan book of over £6m, with zero losses so far, thanks to what’s being touted as expert underwriting.

That underwriting process combines an emphasis on management experience, business planning and on the personal and financial involvement of the Directors. FundingKnight’s offering is comprised of term loans to SMEs with a minimum two year trading record, property bridging loans (delivered in partnership with Alternative Bridging Corporation) and renewable energy finance. Just Cash Flow’s typical customer would tend to be a little on the small side for a FundingKnight term loan. The newly forged partnership will take the funding generated from FundingKnight’s private investor base and use it to finance the types of growing businesses that meet with Just Cash Flow’s credit criteria.

From Graeme Marshall's perspective, the Just Cash Flow partnership may prove to be fertile ground for discovering and building loyalty amongst businesses that may before long be looking to make use of FundingKnight's core product set. The FundingKnight boss commented:

"This relationship represents a fantastic way for FundingKnight lending community to continue to support a wide range of UK SME's by plugging into Just Cashflow’s experience, underwriting and growth aspirations. This provides a complementary investment opportunity to the wide range of other FundingKnight loans, and enables more UK businesses to benefit from the alternative finance space.”

The union of FundingKnight and Just Cash Flow intends to facilitate a minimum of £4m in lending to SMEs. The former has lent just shy of £15m to date. The new product offering has the look of an eligible candidate for funding under the British Business Bank’s “Help to Grow” scheme – which was announced in George Osborne’s latest Budget and which carries £100m of firepower. The investment programme will deliver funding to delivery partners capable of writing loans between £250k and £2m to high growth firms that do not wish to take on equity funding but lack the capacity to take on certain forms of debt.

John Davies, Director of Just Cash Flow, summarised the value of the partnership for SMEs:

"This is excellent news for UK businesses as our experience shows that as they grow they need access to finance and need to establish a record of successfully borrowing and making repayments. This arrangement will effectively increase the early funding available to businesses and importantly help them establish a good credit record which will be invaluable in the future.”

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