Finance · 11 January 2018

FSB Funding Platform promises to transform small business lending market

Top view,businessman with spyglass on Stacks of gold coins. vector illustration,EPS 10.
FSB Funding Platform will use AI to connect borrowers with suitable lenders

A new funding platform has launched with a pledge to “transform” finance opportunities for small business owners, using AI to improve access and transparency for borrowers.

The FSB Funding Platform, launched Wednesday 10 January by the Federation of Small Businesses (FSB), will use “intelligent matching” to connect applicants with the most suitable finance provider, with a lending panel it claims will meet diverse needs.

The platform has been developed by fintech firm Finpoint, a non-bank lender, and will enable finance seekers to compare different options and negotiate directly with providers. No fees are paid until the transaction is completed.

Owners will input company information, how much they want to borrow and how the loan will be used into a single application, which is anonymously released to lenders. Borrowers are then able to navigate the platform as a loan comparison service and decide who they wish to speak to.

Read more: What does the future hold for crowdfunding?

A pilot of the platform in three UK regions found that the average amount a small business owner sought to borrow from an alternative finance provider was £39,000 – half the amount requested from “traditional” high street lenders.

It also showed lending to be strongly asset-driven. Some 40 per cent of business owners seek alternative finance for equipment purchases, while the same number have looked for invoice finance to free up working capital.

The service will offer borrowers a range of finance options, from peer-to-peer (P2P) lending and asset finance to niche areas such as pension-led funding.

Commenting on the platform’s launch, Dave Stallon, FSB commercial and operations director, said it represented a “real step change” for small businesses.

“We’re so pleased to be able to offer this exciting platform to our member base. Although it’s harnessing the latest innovations in tech it offers a very simple way to access finance, as well as access to human financial advisors.”

He added: “It will transform the business funding market.”

Guy Bridge, Finpoint managing director, said a service-driven approach would support the needs of small business owners.

“We haven’t seen enough transparency in the market, and we remain motivated by how we can use technology to provide an efficient service, but perhaps most importantly, we were keen on providing high quality customer service, which means any one of us may be on the phone when you call us up with a question about your funding needs,” he explained.

Ratesetter, Funding Circle and Assetz Capital are among the P2P lenders participating on the platform.

The British Business Bank has put £60m into a new small business asset finance programme

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.