Barclays is to expand its invoice finance offering for SME clients, having partnered with MarketInvoice, a fintech firm and Europe’s largest online invoice financing platform.
In doing so, Barclays has committed to acquiring a “significant minority stake” in the firm, the bank says in a statement.
The bank also plans to fund invoices via the platform, growing its asset base in the small business segment.
The aim, Barclays adds, is to give SME clients “seamless access to innovative forms of finance”. As a result of the partnership, customers will get access to MarketInvoice’s single invoice finance product as well as broader digital invoice finance facilities.
MarketInvoice’s platform allows SMEs to upload their invoices and sell them to investors, thus unlocking cash during the invoice’s payment period, which can often be up to 120 days. Since it was founded in 2011, MarketInvoice has funded more than 90,000 invoices worth over £2.7bn.
The new product will be introduced to Barclays customers “over the coming months” in East Midlands, West Midlands, Herts and North West London, with a full roll-out across the UK set to commence in 2019.
MarketInvoice is among a sea of fintech firms seeking to tap into a booming invoice financing market. As reported by GTR in its recent fintech feature, these firms differentiate themselves through technology, utilising emerging tech to shore up security and speed up transaction times.
Most recently, MatchPlace, a platform that has been offering foreign exchange and payment services for SMEs since 2016, launched a peer-to-peer invoice financing service in the UK. Seeing a “huge potential” for invoice finance across Europe, the firm expects to soon expand its service to Portugal, France and Spain, and aims to build a book of £30mn within the next three years.
There seems to be plenty of space for growth within this market, as more companies (SMEs in particular) move away from traditional banking products to more innovative ways of optimising their working capital. MarketInvoice recently announced that in one year it almost doubled the average amount advanced to UK businesses – from £606,000 in 2016 to £1.14mn in 2017.
The partnership with MarketInvoice is undoubtedly an effort by Barclays to capitalise on this trend and stop the flight of SME customers toward alternative financiers.
“Invoice financing gives small businesses the power to obtain funding in a fast and innovative way. It is a product that has come of age in the digital era, it’s efficient, effective and controllable for small businesses,” says Ian Rand, CEO of Barclays Business Bank, commenting on the new partnership.
Barclays is the first UK high street bank that MarketInvoice has partnered with. Anil Stocker, MarketInvoice’s CEO, says: “It’s exciting to be combining the knowledge and footprint of a 325-year old British banking institution with MarketInvoice’s tech-led online finance solutions. Bringing this together in a strategic partnership can only mean good news for UK businesses, with the segment we’re targeting responsible for upwards of 60% of UK employment.”