LONDON, February 7, 2012 /PRNewswire/ --
- Volume on next generation financing platform grows to in excess of £1m per month
- 60+ SME clients signed up to access growth working capital financing
- Restricted bank lending overcome by innovative technology based auction platform
Online auction platform MarketInvoice has completed over five million pounds worth of auctions to UK SMEs within a year of launch. With over 150 auctions to over 60 UK SMEs, MarketInvoice has helped many small businesses within the UK overcome the "double credit crunch". Squeezed between large corporates delaying payment and restricted bank lending, MarketInvoice has been able to channel capital directly to SMEs.
So what does MarketInvoice do? Invoice discounting is an age old industry. The Babylonians advanced cash against future payments, and now in the UK it is a sizeable industry, with c. 13% of GDP of being factored. Over £200bn is factored in the UK alone. MarketInvoice takes this existing model and turns it on its head, providing a kind of "eBay for invoices".
The structural problem is that of late payment. Small businesses in the UK are constantly owed over £20bn in overdue invoices. Payments are overdue by an average of 26 days. By some estimates, 53% of small companies have been hit by late payment in the last 12 months. Traditional factoring attends to this problem in a limited way. It requires restrictive debentures and personal guarantees. It is expensive. Banks overcollateralise when they advance cash against invoices. All in all, it is not a great deal of for the SME.
MarketInvoice is a completely new taken on this ancient financing structure. Invoice discounting finance is turned on its head by the auction based model. Rather than a bilateral relationship between a bank and a factor, MarketInvoice brings new capital into a market. Rather than factor financed by a back to back bank funding line and a thin sliver of equity combined with exposure to a whole debtor book, MarketInvoice is a marketplace. This dynamic completely changes the risk and pricing model in this form of finance.
Bank lending has seen chronic restriction in the UK. With the impact of Basel III legislation and continued economic turbulence, it seems that invoice volume is set to continue to grow into 2012. Innovative use of new forms of working capital finance is a key tool of any ambitious business owner looking to grow out of the recession, create jobs, and ultimately, bring Britain a better future.
MarketInvoice was recognized as a top 20 start-ups of 2011 by leading SME commentator Startups, as well as being shortlisted for "Best Alternative Funding Provider" the March 2012 Business Moneyfacts Awards. MarketInvoice was also selected as a Real Business Red Bull Future 50 Most Exciting New Business in September 2011.
MarketInvoice is an innovative provider of short-term finance for small and medium companies. It provides a cloud-based online marketplace where companies can selectively sell their invoices issued to large debtors, who often take a long time to pay, to receive cash upfront. Global institutional investors compete among themselves in real time to bid on these invoices and advance cash, enabling companies to grow and cover costs.
MarketInvoice is confidential, fully flexible and transparent: there is no disclosure to debtors, companies have no contractual obligation to sell invoices, do not pay any ongoing fees or arrangement fees and there are no requirements for personal guarantees or all asset debentures.
MarketInvoice provides institutional investors with direct access to the trade receivables asset class and its unique benefits: typically, investors can expect high annualised returns, short investment duration and low risk as invoices are consistently from blue chip debtors and verified by MarketInvoice. MarketInvoice provides all required information investors may need to make an investment decision.
Registered Office: MarketInvoice Limited is registered in England and Wales. Address: 50 Featherstone Street, London EC1Y 8RT (Company No. 7330525)
SOURCE MarketInvoice Ltd