A SMALL business loan has been made using Open Banking data via business finance aggregator Funding Options.
It is the first time Open Banking data has been used by a UK fintech for the comparison of small business financial services, according to Funding Options.
The loan saw a Kent beauty salon borrow £10,000 from alternative lender Iwoca in just one hour and 23 minutes.
Funding Options is now using Open Banking data to fast track SME credit approvals.
It uses 40 data points to detect how a small business is performing and its likelihood to default based on a number of factors including current account performance, cash flow and behaviours.
“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,” said Conrad Ford, chief executive of Funding Options.
“Every business is individual but the process of accessing finance until now has been standardised; a perennial absurdity is that small- and medium-sized enterprises (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.”