Barclays Bank has struck a deal with major UK invoice financing company in a move which it says will give its SME clients ‘seamless access’ to new ways to manage cash flow and generate growth
The bank has committed to a ‘significant’ minority stake in MarketInvoice, Europe’s largest online invoice financing platform, and says the plan is part of its strategy to invest in new business models for growth.
Founded in 2011, MarketInvoice has since funded invoices worth more than £2.7bn and Barclays is the first high street bank to enter into a strategic partnership with the company, which will give their customers access to MarketInvoice’s proprietary single invoice finance product as well as broader digital invoice finance facilities.
With many small and medium-sized enterprises (SMEs) experiencing cash flow problems caused by payment periods of up to 120 days, invoice factoring or financing is growing in popularity. Under the system, SMEs who sell goods or services to other businesses can upload or sync their invoices to MarketInvoice’s platform and sell them to investors, unlocking fast access to funding, albeit at a cost.
The offering will be introduced to Barclays’ SME clients over the coming months in areas across the UK, including the East Midlands, West Midlands, Herts and North West London, with a full roll-out set to commence nationwide in 2019. Barclays also plans to fund invoices via the platform in the future, growing its asset base further.
‘It’s exciting to be combining the knowledge and footprint of a 325-year old British banking institution with MarketInvoice’s tech-led online finance solutions. Bringing this together in a strategic partnership can only mean good news for UK businesses, with the segment we’re targeting responsible for upwards of 60% of UK employment,’ said Anil Stocker, MarketInvoice CEO.
‘Barclays has a long history of innovation being the first bank to introduce the credit card and the ATM. It makes total sense to partner and introduce our online business finance solutions for their large customer base.
‘It’s easy to forget that the companies you see on the FTSE 100 all started as small businesses with founders following a passion. In focusing on the needs of these entrepreneurs through this collaboration, Barclays and MarketInvoice will truly transform the experience of UK companies in sourcing finance.’
Ian Rand, CEO of Barclays Business Bank, said that many businesses are experiencing significant problems from customers forcing them into longer payment terms.
‘A number of our clients told us that they feel pressured into offering longer payment terms in order to stay competitive. This ties up their cash flow, preventing them from seizing growth opportunities,’ he said
‘Invoice financing gives small businesses the power to obtain funding in a fast and innovative way and capitalise on those moments. Our corporate bank already offers invoice financing to large businesses, so it’s great news that we’re able to extend the proposition to work for our SME clients as well.’
He added that Barclays also recently launched £100,000 unsecured lending for SMEs, doubling its maximum for unsecured business loans from £50,000 to £100,000.
Report by Rob Munro