A beauty salon in Kent, UK, is one of the first businesses to successfully source a small business loan using Open Banking data via Funding Options, the UK’s leading online comparison marketplace for small business lending.
The granting of the £10,000 loan to the Kent business is significant for the fintech and small business community. It’s the first time that Open Banking data has been used by a UK fintech for the comparison of small business financial services, a key focus for the Competition & Markets Authority (CMA) recent investigation into the UK banking industry. From application to approval the process was 1 hour 23 minutes, leading to funds being received on Monday 5 November 2018.
Funding Options is using Open Banking data to ‘fast track’ SME credit approvals. Armed with insights drawn from up to 40 data points, the Funding Options process detects how a small business is performing and their likelihood to default based on a number of factors including current account performance, cash flow and behaviours. The result is that small businesses, previously refused credit with traditional lenders, now have the opportunity to access alternative funding designed around their needs via the Funding Options comparison marketplace.
Conrad Ford, founder and CEO of Funding Options says:
“The announcement today is a first for us and another step forward in the fintech and small business communities as Open Banking data starts to make a real difference at the grass roots level to UK business. Every business is individual but the process of accessing finance until now has been standardised; a perennial absurdity is that SMEs end up scanning their paper bank statements, only for the data to be manually re-entered into the underwriting systems of modern online lenders. Now businesses can access a thriving market of alternative lenders ready to deliver much-needed funding for the SME community while driving forward the UK economy as a whole.”
Multiple award-winning Funding Options was one of the first companies to be authorised for access to live Open Banking data as an Account Information Service Provider (AISP) under PSD2. As one of just three finance platforms designated by HM Treasury for the bank referral scheme, and regulated by the Financial Conduct Authority (FCA), Funding Options is already the UK’s leading online comparison marketplace for small business lending delivering £100m+ annually in vital finance to thousands of SMEs.
This live use of Open Banking data to enable comparison of SME financial services builds on research and development (R&D) work by Funding Options in its winning entry for Phase 1 of Nesta’s Open Up Challenge – a prize fund backing next-generation financial technology for small businesses – as well current work by Funding Options in Phase2 of the Open Up Challenge, which is currently in progress. The use of Open Banking data will allow Funding Options to cost-effectively route more SMEs to the right lenders at scale thanks to automated and accurate decisions delivered by its technology-led innovative platform.
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