Cashplus announces application for BCR Pool C funding to boost UK small business lending

  • Cashplus to build pioneering business credit rating tool if £10m award granted and commit £100m in new lending
  • Leading digital challenger seeks to accelerate product development and build on existing plan to serve 10% of new UK businesses from current share of 7%
  • Business is currently applying for full bank licence which will allow it to unlock c. £300m of lending capital for UK SMEs

Cashplus, the leading UK challenger to banks, today announced that it will apply for a £10m award from the Banking Competition Remedies (BCR) Capability and Innovation Fund (CIF).  

If successful in its bid, Cashplus will boost lending to UK small businesses with a series of new credit products, including a UK-first credit rating tool for new businesses, and has committed to lend a minimum of £100m to SMEs through the new initiatives.

The new ‘Business Creditbuilder’ tool will be developed with a major third-party partner and will allow new businesses to build a credit ‘score’ by augmenting company information with company directors’ personal credit record and other data, then applying advanced analysis to assess credit risk.

Cashplus, which plans to provide at least 10 per cent of all new UK business accounts before 2024, has identified a lack of lending from traditional banks as a major cause of failure for fledgling firms.

Rich Wagner, CEO of Cashplus, said: “If successful, we’ll use these funds to build on our track record of delivering smart, simple products that offer real benefits for customers.

“Having been there ourselves, we understand that small businesses too often face the Catch 22 situation of trying to build a credit footprint while being refused even a modest loan. The big banks just aren’t interested and it’s our mission to step in and support this vital pillar of the UK economy.”

Cashplus, which would also make a significant capital investment to BCR-funded projects and will lend at least £100m of additional lending capital through new products designed specifically for small businesses, as well as ensuring new lending products are directly integrated into its suite of ‘API’ tools. These allow businesses to easily manage payroll, accounting and other functions directly from their Cashplus account.

The company expects it new products to significantly benefit overlooked customers, including those from UK regions where business growth is declining, and female entrepreneurs, who would see a proportionately greater benefit from Business Creditbuilder because women tend to hold better personal credit records.

The company, which has serviced over 1.6m customers across the UK, notes that 2018 saw the first year-on-year fall in UK businesses numbers in nearly 20 years, with business closures outnumbering new businesses in Yorkshire and Humberside, East Midlands, East of England, and the South West.

Rich Wagner added: “This fund is intended to increase competition and the availability of banking services for SMEs right across the UK, not just inside the M25. Cashplus is the strongest and most credible challenger to the incumbent high street banks, with a sustainable business model that has returned seven years of profits and already serves seven per cent of all new UK start-ups.”

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