MarketFinance, formerly known as MarketInvoice, is a UK-based company that offers financial services. It specializes in business loans, finance, and corporate solutions. Established in 2011, the fintech business lender has loaned out over £2.6 billion to thousands of businesses in the UK. According to PRNewswire, MarketFinance has used its risk engine and proprietary technology, along with personalized service to improve the lending experience. It enables enterprises to access credit lines seamlessly to suit their needs and attain their desires to expand. The following are 20 things you didn’t know about market finance.
The founders of MarketFinance are Charles Delingpole, IIya Kondrashov and Anil Stocker. They founded it in 2011 with the intention of funding small enterprises. High street banks often shied away from funding such enterprises. Anil Stocker has been the chief executive officer of the firm since it started, and Kondrashov has served as its managing director. In 2017, Gile Andrews became the company’s first chairman. The company raised 930,000 pounds in seed funding in 2011, and it announced that the British Business Bank would start to fund enterprises through its platform. By 2015, MarketFinance opened an office in Manchester and raised a 6-million-pound series A funding round with Paul Forster and Northzone, a venture capital firm. The company received an additional £7.2 million from MCI Partners and Northzone. In 2018, the company announced that it had funded over £2 billion worth of trades on its platform. In 2019, MarketFinance completed a series B funding round, and it raised £45.8 million from Santander InnVentures, Barclay's bank. MCI Capital, Northzone, and Viola Credit.
19. Investors and Partners
Various investors fund enterprises through the company’s platform. They range from regional funds, institutional investors, and banks. In 2013, MarketFinance received £5 million in funding from the government to lend to small enterprises through the Business Finance Partnership. Vince Cable, the business secretary, announced that the company would increase financing through non-bank lenders. In September 2015, the deal was extended for an additional three years, and this took the total investment in the company’s platform to £10 million.
18. Product suite
MarketFinance is evolving based on its customer’s needs, and it now serves large enterprises with loans and invoice finance. The company’s most recent product development enables business borrowers to select from a wide range of lending products, both secured and unsecured. Borrowers can easily see their finance facilities, meaning that they can have a clear view of the amount of money they can borrow when making business decisions.
- Invoice finance – Every business can obtain finance for selected invoices or finance every invoice on a rolling basis. The company offers up to one million pounds in invoice finance.
- Business loans – Qualifying enterprises can access up to 250 000 pounds over 1 to 3 years with weekly or monthly payments. This can rise up to 500,000 pounds in the future.
- Corporate lending – Larger enterprises can access up to 5 million pounds in structured facilities by combining business loans and invoice finance.
17. It has offices in Manchester and London
MarketFinance operates from Manchester and London. Its online platform allows enterprises to access different flexible finance solutions easily and quickly. Real individuals back the smart technology, allowing enterprise owners to save time and concentrate on expanding their enterprises. It provides financing to companies of different sectors and sizes. Businesses can obtain capital for a wide range of things, including paying suppliers and staff, as well as launching new services or products as well as accelerating growth.
16. It is backed by many banks
Some of the banks that back MarketFinance include Santander, Barclays, Northstone (a European venture capital fund), and Viola Credit. According to Startupsmagazine, MarketFinance has advanced more than 342 million pounds for institutional investors in 2020 to meet the needs of enterprises in the U.K.
15. The invoice finance product is more appealing
Most of the company’s lending is through the invoice finance product that provides a short duration investment opportunity such as thirty-five days. Currently, it is available under CBILS and non-CBILS terms that offer net returns of up to eight percent to investors. This provides an attractive risk-reward dynamic and diversification, particularly because the UK government backs 80 percent of the advance under CBILS.
14. It’s one of the largest invoice finance platforms
As one of the leading peer-to-peer invoice platforms, MarketFinance acknowledges that it understands the frustrations and stresses that small enterprises face daily. Even though it cannot fix everything, the company explains that it can provide the financing businesses need to improve their cash flow. The company’s team believes that the more time business owners save on administration and finance-related tasks, the more hours they can pour into their business. Over the last ten years, MarketFinance has offered easy and quick business finance to over 10,000 small enterprises across the United Kingdom. The company says that the updates and new funding solutions it has launched is designed to provide its clients with the easiest and fastest business finance in the market.
Borrowers pay several types of fees when they obtain financing from MarketFinance. One of them is a subscription fee, which is a fixed fee payable each month for the facility. Borrowers also pay a listing fee that covers the expense of CHAPS payments to send money. They also pay a discount fee (interest) which is the interest charged on the funds they use. The lender calculates personalized interest using various data points. It takes the duration of the invoice under control as well as the financial information about the customer and company. The interest accrues on the total advance, which the firm calculates before taking off its service fee.
12. It applies a buffer on trades
At times, customers pay invoices late. For that reason, MarketFinance often applies a two-week buffer on its customer’s trades to allow for additional time for the payments to reach it. Once the buffer expires, the lender considers the trade overdue and follows a process to determine why the payment is delayed. If ten days have passed since the payment was due and the customer has not provided payment, the firm provides the customer with the options to pay the outstanding balance or come up with a payment. If a payment is delayed, customers can ask for an extension. If the customer does not take those steps by the 17th day, the company sends a Demand for Repurchase. This means that they need to pay the outstanding balance and a fee of up to ten percent.
11. It allows customers to leave a contract early
If customers select the subscription option, they can opt to leave their contract early as long as they pay the remaining subscription fee. If customers need to end the contract when the agreed term ends, they need to provide the company with a notice of three months.
10. The advance rate is lower for certain sectors
At times, the customers of a business fail to pay invoices in full for reasons such as trade disputes or genuine mistakes. For that reason, MarketFinance never advances a hundred percent of an invoice’s face value to give it some breathing space in the event of underpayments. The company reduces its advance rate in instances where underpayment is common in certain sectors compared to others.
9. It requires borrowers to have business bank accounts
MarketFinance requires borrowers to connect their business accounts to their MarketFinance accounts so that the firm can get the financing their business needs much faster. When customers provide the firm with their business accounts, it obtains the information required to authorize higher unverified limits. It usually deposits the funds in the customer’s accounts within eight working hours.
8. It verifies invoices from new customers
If you upload an invoice from a new client, MarketFinance usually contacts the client to verify the invoice. At that stage, the firm also confirms the trust account details with your client. You need to inform your customer in advance of the company’s call so that they can be aware that they will be contacted. When contacting your customer, the representative will not disclose that it is calling on behalf of MarketFinance. The company’s preferred approach is saying that it is calling on the behalf of your business or is your company’s finance partner.
7. It requires the customers of a business to pay into a trust account
MarketFinance takes an assignment on the invoices it refunds, meaning that the borrower transfers their legal ownership to the firm. It’s an essential security requirement that the customers of a business need to pay the proceeds directly to MarketFinance. When customers pay an invoice, the entire amount gets into the trust account. MarketFinance deducts the amount it has already advanced to the borrowers against the invoice as well as its fees and transfers the balance that remains to their business bank accounts.
6. It offers flex loans
A flex loan is similar to an overdraft or credit card. It provides the borrower with an agreed limit of between £5,000 and £100,000. As a borrower, you can access the entire limit right away or withdraw smaller amounts any time you wish. A flex loan offers flexible terms, and you can select the repayment schedule which is most suitable for your business. The available balance adjusts automatically based on the amount one has withdrawn and repaid. In the opinion of Crowdfundinsider.com, flex loans offer business owners fast and flexible access to amounts of up to £100,000. They also enable business owners to obtain smaller amounts of money to manage their regular cash flow needs. Business owners can use the loans to manage operating expenses such as salaries, rent, or supplier payments.
MarketFinance provides several impressive features through its invoice finance services. Its aim is to keep the entire process fast and simple without compromising on quality. Some of these features include:
- An intuitive and simple interface that makes it simpler for customers to manage their accounts.
- A fast application process ensures that money arrives in the borrower's account 24 hours after approval.
- A cash advance of up ninety percent.
- Options to subscribe to a month or use a pay-as-you-go plan.
- UK email support and telephone during the workday.
- The option to set up automatic payments through the confidential invoice discounting service.
- Zero hidden fees, meaning that the borrowers always know what they are paying and the amount the finance costs.
- The opportunity to receive an accurate, competitive, and tailored quote based on your business needs.
There are a few drawbacks of using the company’s services. One of them is that the cost of your lawn finance might vary between transactions if you work on a pay-as-you-go basis. Similarly, if you set up a 12-month contract and discover that you are not using it appropriately, you will have to pay the monthly fees. In addition, the entry requirements for starting to use the services are somewhat high for startups. Another downside is that if you want to use MarketFinance’s best services like contract finance and confidential invoice, the conditions are higher.
The Financial Conduct Authority does not regulate MarketFinance because it only operates in invoice finance. Yet, the company has other securities. The firm belongs to the peer-to-peer finance association that regulates alternative financial services in the United Kingdom. For that reason, the company operates under a stringent set of guidelines. MarketFinance has a great reputation on Trustpilot. Many positive reviews celebrate the services it offers. Its website is encrypted and secure, meaning that the data of its customers remain safe.
2. Quality of services
The quality of services of MarketFinance are impressive. As an innovator in the financing market, the company has continued improving its service. The company serves thousands of enterprises, and this is a testament to its quality. It is easy to get started with MarketFinance, and its website offers a great user experience.
1. Security required
To get an invoice finance facility, borrowers need to provide security, which differs based on their specific business and requirements. Some of the securities the company may ask for include fraud indemnity, personal guarantee, and debenture.
Written by Allen Lee
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