Small Business Lending: MarketInvoice

Small Business Lending: MarketInvoice
Anil Stocker, Co-Founder & CEO, MarketInvoice

MarketInvoice is the world’s largest peer to peer invoice finance platform, connecting small businesses with investors.

MarketInvoice processes more than £30 million of loans per month. Because the loans are secured against invoices, MarketInvoice has a high collection rate of 89 percent and a loss rate of only 13 basis points, according to Stocker. The average transaction size on MarketInvoice is £60,000 and the average loan duration is 40 days.

Stocker says the following factors explain the appeal of invoice finance to investors:

  • Lending against invoices offers attractive risk-adjusted returns to investors compared to other asset classes like equities, savings and fixed income.
  • MarketInvoice utilizes various data sources when pricing risk, including e-accounting platforms and social media (in order to authenticate individuals at borrower companies and support KYC compliance). By integrating with multiple data sources, MarketInvoice can price risk in “a completely new way,” opening up new opportunities for investors, Stocker says.
  • Along with other platforms, MarketInvoice is giving investors more choice in regards to the types of businesses they want to lend to and the kinds of loans they want to provide.
  • Similar to other platforms, MarketInvoice seeks to be fully transparent by explaining exactly how its platform works and what costs borrowers should expect to face when transacting through its platform.
  • Investing through MarketInvoice gives investors a chance to support the economy by lending to some of the UK’s most exciting high-growth companies, including firms exporting their goods globally.

Stockman added that 80% of the businesses borrowing on MarketInvoice never used invoice finance before and now come to the platform 15 times per year on average.