MarketFinance has committed to expanding its product range and making its offering available to sole traders and smaller start-ups after securing a £10m grant under the Banking Competition Remedies (BCR) capability and innovation fund.
The BCR scheme was set up by the UK government to distribute £775m from Royal Bank of Scotland as a condition of its state bailout in 2008.
MarketFinance said in its submission that the grant would be used to offer more choice to customers and expand its client base by expanding to sole traders and low turnover small- and medium-sized enterprises (SMEs).
The alternative invoice finance and business lending platform said it would lend to these groups by the second quarter of 2021 and will also expand partnerships with other fintech firms.
It aims to have lent £1bn to SMEs by 2022 and £2.4bn by 2024.
“We know smaller SMEs and sole traders make up more than 90 per cent of companies in the UK, yet they are at the greatest borrowing disadvantage,” Anil Stocker (pictured), chief executive of MarketFinance, said.
“Our risk models are much better at understanding and serving these businesses than those of conventional lenders.
“We will match this £10m grant with money from our own funds to deliver this future vision.
“But, we can’t do it alone. We will be reaching out to a broad spectrum of partners who share our vision and ambition to deliver these goals.
“Our partnerships with Ebury, Barclays and Xero are testament to this. They are driven by agile people who deeply care and want to make a difference. We look forward to meeting more like-minded partners that will join us in this mission.”
Ebury, which has partnered with MarketFinance on coronavirus business interruption loans, has also secured a £10m grant that it will use to integrate its forex and trade credit products onto one digital platform.
Other recipients of the latest grants include Virgin Money and ClearBank.
“We know that the winners and all SMEs in general face challenging times as we head towards winter with both the Covid-19 pandemic and the resulting economic challenges ahead,” Richard Anderson, chair of BCR, said.
“For that reason, it has been exciting to see a very wide range of innovative approaches from so many applicants to supporting all sizes of SMEs in their banking needs.
“It has been difficult to narrow the awards down to a small number of outstanding winners and BCR looks forward to monitoring progress as they implement their programmes.”