Fintech Alliance

Funding Xchange: giving SMEs the options they deserve

Publication: Fintech Alliance
10th January 2020

Funding Xchange: giving SMEs the options they deserve

Over the past few years the world of consumer finance has gone through a transformation, with significantly more options available. This development has been somewhat slower when it comes to options for businesses — in particular for SMEs. This is what Katrin Herrling — a dairy farmer who also happened to work in finance with some of the world's biggest banks — found when her Irish bank increased rates for her business following the Great Financial Crisis of 2008, and was left with no alternatives.

“If anyone should have known what to do it should have been me, because I was sitting in global banks talking to executives about how to rebuild their commercial lending function,” Herrling recalls. “I had all these high level discussions but I had no idea where I was going to take my own business. We decided there must be a better way.”

Here is where Funding Xchange comes in. They leverage data to create a marketplace for all the funding options that are available to small businesses and help them to make an informed decision on what's best for their current needs. Funding Xchange is free, transparent, unbiased, quick and most importantly — simple.

Banks could end up spending a lot of time and money approving a loan with a relatively low return. Funding Xchange automates the lending process by providing live data on a digital platform, structuring applications so the process isn't just easier for the SME, but for the lender.

Aside from increasing demands from SMEs, regulation has been a transformative factor in the finance environment. The SME Act now means when a bank declines an SME finance it must offer to refer the business to alternative platforms. Risk aversion has meant the quality of customers being declined by banks has improved, meaning more customers are turning to alternative solutions and could prove lucrative for challengers.

Moving forward, Funding Xchange will continue to provide data and insights around alternative finance options, but also recognises small businesses need support, not just capital. “We're interested in providing a digital tool that helps businesses access finance and understand how to build financial resilience,” says Herrling.

Read the full article on Fintech Alliance