Find out how a new generation of funding models could offer the SMEs that survive the crisis a very silver lining.
Nimbla’s founder and CEO Flemming Bengtsen spoke recently about economic recovery for Britain’s SMEs on Radio Finance with host Emmanuel Daniel, and SME Taskforce colleagues Wiserfunding Co-founder Gabriele Sabato, and Trade Ledger Co-founder Martin McCann.
The conversation explored the UK Government’s decision to channel its £330 billion in Covid-19 support through fintechs, after it became clear that traditional banking alone could not offer the scale and speed of rollout needed to support Britain’s Small and Medium Sized Enterprises (SMEs).
“There’s a huge gap in funding for SMEs in normal times, whereas between us, we actually got all of the new capabilities required to provide digital lending.”
– Martin McCann, Trade Ledger
You may recall that the SME Taskforce successfully lobbied the government for the new trade credit reinsurance scheme launched on June 4th, backdated to April 1st, running until December 31st. The scheme will enable trade credit insurance to continue to facilitate British trade, but the discussants argued that the capacity to lend must scale 100 times compared with ‘old’ normal levels, while processing speed needs to increase tenfold.
“We can adapt a lot faster than the bigger guys on the market.” – Gabriele Sabato, Wiserfunding
Consequently the government is working closely with financial innovators to stem the tide of insolvencies that have already flooded newspapers this summer. The wealth of Government loans that have been provided to cope with the crisis also have led to concerns over whether a credit crunch and second bank-bailout are around the corner, as raising capital will be a challenge due to exorbitant levels of post-pandemic debt.
“[Nimbla gives] a whole level of control over expected losses that were not previously available with lending products.” – Martin McCann, Trade Ledger
But technology is offering solutions. To help businesses navigate a potential credit crunch scenario, Nimbla recently integrated Wiserfunding’s credit risk assessment software, which uses Artificial Intelligence to assess a business’ resilience, rather than simply its probability of default (a less useful indicator in such economically uncertain times). The software provides a far more ‘live’ and granular picture of credit worthiness that has previously been available, especially to SMEs.
These technologies set the stage for an influx of next generation lending opportunities to small businesses via digital channels. To find out more about how your business can benefit from the latest funding solutions post-COVID, you can chat with Nimbla live, or contact [email protected].
You can also watch the full video of this conversation on RadioFinance.com.