Tag Archives: SMEs

LFP034 – SME Lending in the Fintech Age with Andrew Mullinger Co-Founder of Funding Circle

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Co-founders Samir, James and Andrew

Co-founders Samir, James and Andrew

Funding Circle need no introduction being the heavyweight SME marketplace lender in the UK and the only global player to have a large footprint in both the UK and the US.  Those on the conference circuit may be more familiar with Andrew’s co-founders, Samir Desai and James Meekings; Andrew has tended to stay at home with his head under the bonnet working on the engine within Funding Circle – that of the credit underwriting process.

SME lending is a prosaic phrase but one that is vital for a modern economy that is undergoing an ever increasing bifurcation into gigantic oligopolistic corporations or smaller companies. Finance is the lifeblood of such smaller companies and as the first line of Andrew’s LinkedIn says:

“The aim of every business should be to change the way other people live their lives for the better, not that of the founders!”

They are certainly doing that and at this rate will deservedly also change the lives of the founders and staff as Funding Circle are on everyone’s “tiny handful” list of big players with very short odds to IPO.

In this show we dive into the world of SME credit and lending in the Fintech Age.

Plenty of hardcore content; points discussed include: Continue reading →

LFP030 – A Deep Dive into Invoice Financing in the Fintech Age with Anil Stocker CEO MarketInvoice

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MarketInvoice London Fintech Podcast

As this is London Fintech Podcast episode thirty and as it’s a big round number I am especially delighted to be joined by one of the giants of the London Fintech scene Anil Stocker, CEO and co-founder of MarketInvoice. Not only do we do a deep-dive into invoice financing but Anil also talks about MarketInvoice’s exciting plans for the future.

I cannot think of one sector of Fintech where there has been adequate competition where the leading player has left their competitors so far behind in their wake as MarketInvoice has in Invoice Finance.

I have long been a fan of MarketInvoice, so much so that a year ago when a friend was discussing with me his son’s business expansion and the need for working capital when dealing with major buyers I had no hesitation in saying “there is one name he should speak to”. A year later they are now a case study on MarketInvoice’s website, their business is booming and I know by direct experience that far from being abstract, good FS, good Fintech can act as enabler for people to grow businesses in the real world.

And what’s better than that?

Businesses use MarketInvoice to selectively sell their invoices to a network of global investors giving businesses immediate access to funds otherwise tied up for between 30 to 120 days. There are no contracts, hidden fees or personal guarantees. New clients can sign up in a couple of days and sell an invoice and draw down funds on the same day.
They have already helped hundreds of businesses overcome the lengthy payment terms of their large customers. Over £420m has been raised through the platform, with businesses using the funds to hire more staff, launch new products and pay their suppliers

Topics discussed include: Continue reading →

LFP029 – Secured & Insured Lending/Borrowing with Angus Dent CEO ArchOver

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Archover London Fintech PodcastNew entrants into Fintech need a twist.  ArchOver has an innovative (a word oft used but rarely accurate) and very interesting innovation of combining Credit Insurance with Secured SME marketplace lending.  Additionally they innovate by not just using single invoices as security (which is common) but by the whole set of invoices (ie “accounts receivable”).

This model they call “secured and insured” – a real belt and braces.  In a marketplace which, post Lending Club IPO has been characterised by a dash for asset growth it is very refreshing to see a P2P that is focused on minimising Lender Risk (as subject I have written about a lot this year – see eg my columns for AltFi News).

Angus Dent
So I am delighted to be joined on the show by Angus Dent CEO of ArchOver to discuss how “secured and insured” lending works.

It’s certainly a fascinating crossover of insurance, banking and the new digital Fintech worlds.

 

In this episode we discuss: Continue reading →

LFP025 – Investor-led Equity Crowdfunding – a Deep Dive with Goncalo de Vasconcelos CEO Syndicate Room

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SR-Primary

I am delighted to be joined on the show today by Goncalo de Vasconcelos CEO and founder of Syndicate Room who are one of my must-know-about equity crowdfunding platforms as they have originated an “investor-led” model of equity crowdfunding which has some powerful advantages.

As I have previously mentioned equity crowdfunding seems to me to occupy this triangle whose three vertices are spivs, “pile ’em high and sell em cheap” and professional. No-one resides at any of the vertices and the whole thing is in evolution.

Maybe I should be clear what I mean by professional … there are plenty of professional firms out there … but I mean more “professional in the way that well established stock exchanges are”. The London Stock Exchange or Deutsche Boerse eg I would say are pretty professional. Fintech as a whole hasn’t got there yet [although as we heard in LFP023 I think B2B-FX is the most professionalised subsector of fintech]

Syndicate Room are definitely one of the few fintech equity crowdfunding firms nearest the professional vertex in my opinion.

Their interesting business model innovation is investor-led crowdfunding (as opposed to company-led which is the general model).  All of their deals are led by an experienced angel investor who has a personal stake in the deal – no doubt far higher than you or I who in essence co-invest alongside. Thus he has conducted his own due-diligence, price negotiation etc before investing.

Topics discussed include: Continue reading →

LFP021 – Special Episode! Consumer Credit and P2P Deep Dive with Giles Andrews CEO of Zopa

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ST-ZopaA14vc051

Giles and friends have really set one of the all-time Financial Services innovation high water marks with their invention of P2P – online lending and borrowing without a bank. They literally created an industry and changed the mould globally as we have seen with multi-billion$ IPOs in the US in December 2014.

As they were the first they have always had a core of “getting it right” – aka not losing customers money – aka getting “high quality consumer credit right”. This they have certainly done as they still produced positive returns through the mega-consumer crisis of 2008.

Not just that but they really get 21stC customer-focused business and have won the “best loan provider award 5yrs in a row”. 51,000 lenders to date have put money through the platform for a total of £750m lending business.

On this show we dive into a number of key issues: Continue reading →

LFP020 – UK SME Finance Referral Scheme with Conrad Ford CEO of Funding Options

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Conrad Ford CEO Funding Options

In essence the (prosaically named) “UK SME Finance Referral Scheme” basically means that soon banks wont be able to tell SMEs to bugger-off any more (which was the reality behind the prosaic (and often very slow) “loan application declined” formula).  Rather banks that turn down loan requests will need to direct SMEs to a portal(s)/alternative finance providers.

This market is far more diversified than fintech folks might imagine – for example the challenger banks Aldemore and Shawbrook have each individually lent more than the entire P2P industry.  Last year Funding Options referred SME borrowers to 50 different providers of finance (in one case saving 100 jobs).  They believe that this number is well in excess of any other players, but even then estimate that they have only addressed about 20% of the possibilities.

As you might imagine whilst the concept is simple the implementation of the scheme is tricky and complex.  Conrad has been one of the key players advising the government in this context and Funding Options are one of the possible portals.

Conrad discusses the scheme and in the process covers the SME funding market – there are possibly more providers in the UK than in any comparable market in the world.

Key topics are: Continue reading →

LFP019 – Special Episode! P2P – Beyond the Metaphors with Rhydian Lewis CEO Ratesetter

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Peter on the left Rhydian on the right. Ratesetter have done 25% of P2P volumes in the UK year-to-date

Peter Behrens on the left, Rhydian Lewis on the right. Ratesetter have done 25% of P2P volumes in the UK year-to-date. They don’t normally look so severe 🙂

P2P (online lending and borrowing) is plagued by media (old and new) descriptions in terms of what are often just metaphors – “P2P disintermediates banks”, “P2P directly connects borrowers and lenders” et al.

Furthermore with a number of different models emerging (which isn’t always obvious to the “paying public”) it gets less relevant to say “a P2P does X” as some of them might “do X” and some of them might not.

Two key models are the more ~marketplace one (eg Lendinvest in LFP013) and the Ratesetter model which is a more savings-like ~fund (the FCA has kittens with those words but that’s their problem not mine :-D), stable return backed by a provision fund.

In this special (ie super-long) episode we move “beyond the metaphors” to discussing what actually happens in P2P.  In FS that means getting into payment flows, bank accounts, legal contracts and the like.  The kind of thing that has been drawn on whiteboards in the City ever since they existed (funnily enough I don’t recall blackboards being there before whiteboards?!).

As an example of where metaphors are misleading, despite reading masses about Lending Club pre IPO, it was only this year that I stumbled on the fact that Lending Club doesn’t do the lending! [The actual loan is made by Webbank headquartered in Salt Lake City (and then assigned)].

Rhydian Lewis is a real star guest to discuss these issues with, as, as he explains, his first scribblings on P2P predate P2P itself by several years so he was a genuine fore-runner.  He worked at Betfair (a P2P betting exchange) and as a Corporate Financier at Lazard so has real experience of tech P2Ps and hardcore FS apart from also having co-founded Ratesetter, invented the idea of a provision fund in P2P and having taken Ratesetter from a startup to the largest P2P in terms of monthly originations at present.

We discuss a whole variety of topics: Continue reading →

LFP011 – 5 Key Challenges to the Success of UK Fintech plc with Dr Louise Beaumont of GLI Finance

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GLI FInance's Platforms

GLI FInance’s Platforms

The Economist has described the emergence of huge numbers of Fintechs as a Cambrian Explosion. Will this be followed by a Mass Extinction?

I am delighted to be joined on the show today to discuss this by a uniquely qualified individual who has a background in solid BigCos, has co-founded a successful Fintech and advises key government departments on UK Fintech including the current Blackett review on Fintech.  This week she has been appointed as Head of Public Affairs and Marketing for GLI Finance.  GLI Finance is an AIM listed company that both invests in AltFi vehicles (see above) as well as investing through their platforms.

Louise is also a woman and one who was showcased in Brummell magazine as one of the top 30 most inspirational women entrepreneurs in the City.  So we warm up the show with the angle of women in Fintech – there ain’t many and the social narrative is rather PC these days. I see three threads at play here.  First what I experienced as the “70s narrative” of equality of identity; then the narrative (to which we all subscribe) of equality of opportunity; but more recently and a little perniciously perhaps a third of equality of outcome.  This last can (ironically) get unwittingly sexist – so for example one sees plenty of calls for more women in tech – but I have never seen many calls for more men in social media – whats that about then? 😀

Louise talks about five challenges, or vice versa five guiding principles for avoid the Mass Extinction of UK Fintech plc (we will have masses of extinctions at the startup level of course purely as so many startups die off anyway).

Around these challenges we touch on Continue reading →

LFP009 – 12yrs At The Fintech Coal Face with William Lorenz of Kwanji

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Kwanji Business Card Back 3

There are relatively few Fintech Founders/Co-Founders, even less that have done it for over a decade and even less that have formed two consecutive Fintechs. I am delighted to welcome such a rare individual on the show today – WIlliam Lorenz.

In 2002 he co-founded Ixaris – a pre-paid VISA & MasterCard card provider which was well-ahead of its time – which he led through many funding rounds and substantial increases in business.

He is currently co-founder and COO of Kwanji, a Fintech of around twenty people, which aims to makes international business easier for SMEs – a worthy goal. Their first product is KwanjiFX, a foreign exchange price comparison site which puts SMEs on the same footing as large companies in terms of the exchange rates and payment functionality they can get.

In this episode we have a wide-ranging conversation around what William has learned the hard way, by being “at the coal face”.

Continue reading →