SME loan made using Open Banking data
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.
Read more: Five ways P2P lenders can capitalise on Open Banking
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.
Read more: Payday lenders could use Open Banking to allay watchdog’s concerns
“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.”
Read more: Equifax launches real-time Open Banking ID checks
