Funding Options and Experian bid for slice of RBS £775m bank competition fund

The small business finance broker plans to jointly develop an online tool to allow firms to more closely monitor their cashflows.

Small business finance broker Funding Options and credit information giant Experian said they will jointly bid for a slice of a £775m fund to promote UK banking competition.

The London-based marketplace and Experian said they will use any cash they secure from the fund to launch a cash flow management tool for small business owners.

They said the online tool, called Totem, will allow small firms to monitor VAT bills, manage invoices, check their credit report and score, and identify any upcoming dips in cash flow.

The pair add the aim of Totem is the address “the three main issues all businesses face: money management, accessing finance and scaling the business successfully”.

The cash has been set aside by Royal Bank of Scotland (RBS), and is part of European Union conditions attached to the £45bn government bailout of high street bank at the height of the financial crisis a decade ago.

Part of the cash, called the Capability and Innovation fund, is aimed at supporting the UK’s 5.7 million small businesses. The fund is operated by Banking Competition Remedies, which is independent of RBS.

The move comes as Funding Options, which arranges over £100m of funding to small firms a year, releases a survey that highlights the most pressing concerns of small firms.

The research, carried out by research body Opinium, shows that almost three-quarters (72 per cent) of small and medium sized enterprises (SMEs) say that a loss of income is the biggest threat to the stability of their business.

It adds that almost half of small firms (44 per cent) worry if the business has enough cash to keep going.

Funding Options managing director Ryan Edwards-Pritchard said: “Small businesses are the backbone of our economy and yet the financial products and services that are available to them are far behind those that are available to consumers. For too long, small business owners have been undervalued and underserved.”

Experian business-to-business and Google tag manager managing director Matt Dunn added the move “is a striking example of how new financial services technology can provide new solutions for businesses, allowing them to make better decisions which will benefit both them and their customers”.

Funding Options, which is run by chief executive Conrad Ford (pictured) and was founded in 2012, and Experian are bidding for £10m from the fund.

Opinium interviewed 500 people in small firms, who work at middle management level and above between April 10 and 15.