Trade Ledger, an online lending platform; Wiserfunding, a digital credit scoring platform for small and medium-sized enterprises (SMEs); Nimbla, a trade credit insurance provider; and NorthRow, a remote client onboarding platform have formed a Fintech taskforce.
The taskforce aims to offer an origination and underwriting platform that will allow banks, alternative lending platforms, and private debt lenders to digitally allocate funding to businesses during the global coronavirus (COVID-19) outbreak.
The coronavirus pandemic has led to immediate and potentially long-lasting impact to the United Kingdom’s economy. This has negatively affected the operations of SMEs, as many of these companies are in chronic need of capital in order to cover their costs.
Even before the expected recession, SMEs had been struggling to gain access to credit with more than £59 billion in unmet lending requests.
Although extraordinary measures have been taken by the UK government, in order to provide funding to companies via grants, the taskforce is concerned that loans and guarantees (such as British Business Banks’ Coronavirus Business Interruption Lending Scheme) might not be able to get to SMEs that need them the most within a reasonable time period.
As mentioned in a release:
“The objective of the taskforce is to put a turn-key lending platform, including risk assessment, KYC and insurance capabilities, at the disposal of the industry to help alleviate the crisis and expedite the allocation of funding.”
The lending platform, which leverages the latest digital technology and data integrations to originate and underwrite lending to SMEs, may be used by lenders, and could potentially serve as the basis of a consortium that would help intermediate between different lenders.
These lenders may include private funds, such as the British Business Bank and the SMEs currently looking for reliable lending services. The platform aims to support any type of term loans, invoice finance, and asset finance. It will also assist lenders in deploying capital within a few days instead of taking weeks.
Martin McCann, CEO at Trade Ledger, stated:
“With the COVID-19 outbreak putting immense financial pressure on global supply chains, now more than ever, SMEs need reliable cash flow if they are to stay in business.”
“On average, it takes around 90 days for lenders in this sector to onboard new customers and establish new credit lines. The government’s capital injection is a massive boost to an underserved market at an extreme time of need but its impact will be lost if lenders aren’t able to get these loans to their customers quickly”