BankiFi, a know-how platform serving to monetary establishments service SMEs, has joined forces with Praetura, another lending firm, to launch a brand new lending-as-a-service answer that may enhance SMEs’ entry to progress funding.
The BankiFi platform is designed to assist small companies entry capital when they might in any other case not meet the factors for conventional excessive avenue banks. Praetura, backed by BankiFi’s tech platform, will ship asset and bill finance to SMEs on behalf of banks unable to help these companies.
Many banks don’t present asset or bill finance options, and those who do usually deal with bigger companies which are extra prone to meet their lending standards.
BankiFi and Praetura’s new answer appears to be like to empower conventional lenders to satisfy the various financing wants of the UK’s small companies, with Praetura adopting the chance of the preliminary funding. Banks are then positioned because the go-to finance supplier, with companies referred again to the financial institution as soon as they’ve grown into the eligibility standards.
In keeping with the Financial institution of England, all internet progress in UK SME lending since 2017 has come from smaller banks or different lenders slightly than conventional excessive avenue banks. In Praetura’s Fund the Hole report, which surveyed greater than 400 UK SMEs in 2023, it additionally revealed that 59 per cent of UK companies say entry to capital has decreased within the final 5 years, with 43 per cent reporting that it is among the greatest challenges they face.
Supporting SMEs throughout a tough time
With this in thoughts, it’s clear that entry to capital continues to lower throughout the UK; leaving many SMEs in a tough scenario and unable to develop.
Mark Hartley, CEO and founder at BankiFi, defined the necessity for the partnership: “We’ve constructed nice relationships with excessive avenue banks because of our bank-friendly distribution mannequin and our capacity to leverage the advantages of open banking.
“Our partnership with Praetura is the pure evolution of our current SME cost options, which have centered on decreasing the time SMEs spend accumulating cash and serving to them to handle money move, progress and now entry finance.
“The primary place many companies go to for lending is their financial institution. The issue is that they usually don’t meet the eligibility standards set out by the financial institution. In these instances, if they’ll’t safe a mortgage, they usually fall via the cracks and stay unserved. What we’re in a position to supply via our partnership with Praetura is an answer that each banks and companies want.”
Peadar O’Reilly, CEO at Praetura Lending, added: “There isn’t anybody within the UK that has the mixed senior funding strains, specialist lending experience and know-how functionality to assist fund this hole for SMEs out there.
“This distinctive partnership indicators a brand new period for SME lending, demonstrating a dedication to innovation, collaboration and assembly the various wants of companies.”
Praetura Ventures has backed BankiFi since September 2021. This renewed partnership additional locks in BankiFi’s dedication to closing the loop and offering an answer that aligns with demand from SMEs.
