Digitalisation
FSB fronts its own small business platform
The FSB has a platform for small business lending, but does it have anything new to offer beyond existing platforms?
The Federation of Small Businesses (FSB) has launched a financial technology platform to match lenders and businesses.
It’s not the first in the small business arena.
A former MoneySupermarket employee set up Businesscomparison.com several years ago; former NACFB head Adam Tyler set up findsmefinance.co.uk; Goldman Sachs and BNP Paribas investment banker Paul Surtees launched AI-driven Capitalise.com with tech partner Ollie Maitland; and businessman Adam Taverner set up Alternative Business Finance, as examples.
Former chancellor George Osborne began the race, when he set the target of creating a market-based response for SMEs to find alternative finance for those who had been rejected by high street banks.
Eventually the Budget in 2016 said that SMEs rejected by high-street banks will be able to access other funding options.
"The Budget announces that Bizfitech, Funding Options and Funding Xchange will be designated as finance platforms to help match borrowers and alternative lenders. And on 1 April 2016 the government will designate the banks and Credit Reference Agencies (CRAs) that are within scope of the SME credit data regulations. This will ensure CRAs will receive SME credit information from high street banks and provide equal access to this information to all finance providers."
The bank referral scheme seemed to have stuttered somewhat since then, with banks signed up to the scheme reporting poor uptake, but market-generated digital platforms have started to take hold.
In the leasing space, Midlands Asset Finance and LDF have both set up lead-generating finance sites attached to their businesses, while parent-backed banks like ING and Nordea have begun D2C digital offerings.
On the face of it, the FSB Funding Platform is familiar as it uses artificial intelligence matching technology to match applicants with finance providers.
It offers free access to over 100 lenders with AI technology matching entrepreneurs and businesses wanting funding.
The advantage the FSB’s platform has over bank or leasing business-created sites is that it represents the customer in the press, and will carry the burden of trust for many SMEs.
Time will tell if this revenue generating site for a trade association representing the businesses it is trying to sell to will work out into a utilitarian tool for all involved.
