The UK Government starts using a private platform to support SMEs.
As part of its Business Finance Partnership, which was setup to boost business funding via non-bank lending channels, the Department for Business Innovation and Skills is committing £5m as an Investor Member on MarketInvoice, an online funding platform for SMEs seeking access to working capital.
Its expected yearly returns are of approximately 10-12%. With funds on the platform recycled every 45 days, the £5m commitment will equate to approximately £40m in investment to SMEs over the next year.
Already, more than 10 businesses across sectors such as fashion retail, marketing, software and telecommunications have benefited from the funds.
Launched in February 2011 by Anil Stocker, Charles Delingpole, and Ilya Kondrashov, MarketInvoice enables SMEs to sell their long-dated invoices to a pool of investors, who in return for advancing most of the funds upfront, take a small discount fee in return.
It has channelled more than £65m to UK SMEs to date.
SMEs using MarketInvoice can sell their invoices selectively, as and when they choose, with no personal guarantees required.