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Funding Xchange and Experian partnered to boost to the coronavirus funding response with a loan eligibility checker

UK-based small and medium-sized business (SMB) lending marketplace, Funding Xchange, has partnered with Experian, a major credit bureau, to give a timely boost to the coronavirus funding response with a loan eligibility checker, per The Fintech Times.

The companies have coreleased an online portal for banks, which SMBs can use to determine whether they meet lending criteria for both the Coronavirus Business Interruption Loan Scheme (CBILS) loans and non-CBILS ones. If they're eligible for a CBILS loan, the online service automatically completes the application process for them. 

The joint response will be impactful for the coronavirus response effort because it will ease the burden on banks and help streamline funding efforts for SMBs.

  • CBILS lenders are under unprecedented strain due to the surge in demand for loans — but the checker should allow them to focus on eligible applicants and expedite loan disbursement. Banks are reporting a surge in enquiries related to CBILS loans and are struggling to process and disburse loans at the necessary speed. The pre-application eligibility checker will screen applications and divert those that don't meet lending criteria, thus allowing banks to focus their attention on eligible applicants. This will expedite the loan application and disbursement process — data from Funding Xchange shows that 4 in 5 SMB loan applications fail to meet qualifying criteria, highlighting the inefficiency of application processing.

  • SMBs are in desperate need of relief and time is of the essence for funding — and the online service will streamline their application efforts. There's heightened anxiety among SMBs as they rush application processes and demand for loans continues to rise. The online portal will benefit SMBs because they won't waste time on lengthy applications that will be unsuccessful, and the marketplace will streamline their access to credit options.

We think the online service will also be beneficial for Funding Xchange going forward, as it will boost customer satisfaction and might attract new lenders to the marketplace. In the long run, this will likely boost customer satisfaction and loyalty from SMBs, as those that use the online portal and have a good experience with the service will likely return to use the lending marketplace's services in the future. What's more, the eligibility checker's associated benefits — efficiency and its ability to alleviate the burden on lenders amid high loan request levels — may entice CBILS lenders that are not yet partner lenders to become part of Funding Xchange's marketplace. This would increase Funding Xchange's pool of lending partners in the long term and provide a better experience for SMBs through increased credit options.

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This article was published in Business Insider - 22nd April 2020