Business Finance Market has now ended and was successfully overfunded
EIS

Business Finance Market

FinTech Business - North East

Business Finance Market

About Business Finance Market

EIS Eligible Investment Opportunity
FinTech Platform Start-up


Making business finance more accessible for SMEs.

Business Finance Market (BFM) is a data-rich fintech platform that will stimulate the market for SME lending. BFM is aiming to streamline the lending process through technology innovation and a re-engineered customer journey, to match lenders and SMEs together to help them secure finance.

Not only will SMEs experience quicker finance decisions based on true addressable market access, but also lenders and intermediaries will have a fintech platform to help manage the end-to-end application process, improve deal flow, and deliver faster credit decisions.

BFM has been founded by a team of senior banking specialists and SME business experts who have experienced the frustrations and failures of the current UK SME lending marketplace from both sides. Their combination of industry knowledge and expertise with a powerful fintech platform, will create a clearly differentiated approach to streamlining the SME lending process.

The Problem

SMEs are gradually being excluded from mainstream banking. In 1988 40% of all bank lending went to SMEs, today it is closer to 4% with an estimated £22bn funding gap to the 5.9m UK SMEs. As banks continue to shed front-line staff, more than 50% (and growing) of deal origination is undertaken by c2,000 Commercial Finance brokers. At the same time, SMEs expectations are changing to include a need for more focused lending products with faster credit decisions and flexible options that improve the chance of funding. With almost 90% of SME loan applications that don’t complete being due to poor process, the lending market has become fragmented and in need of innovation.

The Bank of England recognises the problem, making numerous recommendations in its March 2020 response to the publication of the Van Steenis Report ‘Future of Finance’. These included promoting the responsible use of machine learning and AI and supporting better credit files for SMEs with a consultation on a new digital data strategy.

The Solution

BFM intends to streamline the lending process through technology innovation and a re-engineered customer journey, to match lenders and SMEs together to help them secure finance. Through a powerful and innovative fintech platform with advanced database, machine-learning algorithms, lenders will streamline the decision-making process based on more intelligent real-time customer data, captured and delivered as part of a re-engineered customer application journey. For SMEs, Business Finance Market will provide a more efficient route to finance and faster lending outcomes.

The Market

The overall UK ‘bank based’ business lending market is worth an estimated £166bn. The average loan origination and repayment cycle is approximately 4-5 years, which means that the ‘new’ lending requirement or Serviceable Available Market equates conservatively to around one quarter of the Total Available Market which is circa £33.2bn.

According to the British Business Bank, 45% of SMEs applied for external funding support in 2020. BoE figures for January 2021, show that SMEs drew down an extra £500 million in loans and the annual growth rate continued to rise, reaching 25.8%. (S&P Global Market Intelligence Mar21)

As the economy begins to bounce back from Covid-19, SME demand for external finance will increase, as businesses look to replace Government-backed loan schemes. At the same time, the digital technology revolution has changed SME expectations. With the advent of digital banking, financial institutions are having to rethink the role they play in the SME lending space to address the financing gap and capitalise on the SME banking opportunity. The challenge for the sector is not only how to streamline and futureproof the lending process, but how to use technology to improve data processing and the customer journey to have a positive impact on deal flow.

The Company

Business Finance Market (BFM) is a fintech business that believes in making business finance more accessible for SMEs. Through innovative use of technology and a re-engineered customer journey, BFM will streamline the lending process, seamlessly matching SMEs, intermediaries and lenders together. BFM will combine an industry-leading fintech lending platform with a deep understanding of the financial sector and its processes to create better-aligned funding options for SMEs whilst delivering efficiencies within the banking market.

With Business Finance Market, applicants will experience an end-to-end digital application process, with fast and efficient choices between lending products. BFM’s use of advanced database and smart machine-learning algorithms - as opposed to slower, less accurate, labour-intensive application processes and legacy systems - will provide BFM with higher profit margins, continued growth opportunities, and the agility to respond more quickly and effectively than its competitors.

The Team

The Business Finance Market team consists of a group of senior banking specialists and SME business experts who have decades of experience working across many of the UK’s leading financial, technology and professional service brands. This impressive, highly experienced, and ambitious entrepreneurial team, has a deep knowledge of the banking and finance industry backed by creativity in marketing and commercialisation. The founding team includes Craig Iley, an experienced commercial banker, author, and founder of two neobanks (Atom Bank and Bank North).

The Plan

It is envisaged that the most likely exit strategy would be an IPO or trade sale within the finance industry.

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Investors

£113,150 invested by 31 online investors
£1,213,250 invested by 35 Professional Investors.