British Business Bank backs its first cash advance platform

By David Stevenson on Tuesday 22 March 2016

Alternative Lending

Liberis scoops £5m facility from government backed bank and pushes past £100m in loans  

London based merchant cash advance platform Liberis has scored a major success with news that the British Business Bank’s commercial investments arm will provide a facility of up to £5m to the platform in order to support finance for small businesses.

Additionally, Liberis has just announced that it has reached a major milestone – providing over £100m in funding to UK SMEs. The platform offers flexible alternative finance for small businesses across the hospitality, beauty, automotive and convenience store sectors. Liberis provides funding from £4,000 to £300,000 to small businesses based on their future credit and debit card sales. The funding is paid back via a pre-agreed percentage of the business’s credit or debit card transactions.

Liberis has now financed over £100m on a cumulative basis, and the company expects to double its annual volumes in 2016 to provide nearly £50 million of funding to SMEs. In total, Liberis has now helped over 3,000 businesses invest in and grow their businesses. The platform's average borrower is advanced £15,000, typically in order to fund refurbishment, stock purchase or expansion. These facilities are usually paid back over seven to eight months.

Funding provided by Liberis has, for instance, helped a number of restaurants and hotels to grow in size – with the Business Cash Advance product proving particularly useful for seasonal businesses.

Peter Wilson, CEO of British Business Bank Investments Ltd, commented: “We are particularly keen to support innovative approaches to providing finance which expand the reach and choice of funding for smaller UK businesses.Merchant cash advances can offer a transparent and aligned financing option for business including some which might otherwise be unwilling or unable to raise finance. We welcome Liberis’ responsible approach to developing the sector, reflected in their customer charter, and believe that their growth plans will help our funding reach companies which might otherwise struggle to raise finance.”

Tom Bason, Finance Director at Liberis, added: “Small businesses are vital to job creation and economic growth yet many still struggle to get loans through traditional providers. Liberis offers a flexible ‘pay as you earn’ option that has proven particularly popular with companies where income fluctuates on a seasonal basis. We want to become the first choice for small business finance by offering a simple and responsible option.”

The British Business Bank investment should help to accelerate this growth. Liberis reckons that the investment by the Bank’s investment arm will support funding for over 2,000 small businesses in 2016 alone and follows a thorough application and due diligence process run by the Bank.

The deal means that Liberis is the only business cash advance provider (to our knowledge) to receive UK Government backed funding. The company thus joins an elite group of alternative finance platforms that have received backing from the Bank, including Funding Circle and MarketInvoice. It's also worth noting that, unlike some of its peers, Liberis does not use a marketplace lending model but instead lends off its own balance sheet. 

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