Cashplus Bank announces Business Creditbuilder and 1% cashback business credit card to support £5bn of SME lending

Cashplus Bank, the leading SME fintech, today announces it will launch a UK-first Business Creditbuilder tool in partnership with Equifax, aimed to increase accessibility to lending for the 65% of new UK businesses who are refused access to credit. Available as a free add-on to fee based Cashplus business accounts, the feature will structure the customer’s monthly account fees as an interest free loan.

65% of new UK businesses are refused credit and independent research commissioned by Cashplus estimates a £6bn “lending gap” between SME credit demand and available credit. The new Business Creditbuilder tool will support these businesses by upgrading Cashplus’s pioneering Creditbuilder for consumers, which has been used by over 200,000 people and remains unique in the UK 13 years after its launch.

The company has now collaborated with credit reference agency Equifax to provide an equivalent product for small and medium size businesses by leveraging a 1-year fix term loan that is payable over 12 months at 0% interest. The 12 payments and repayment of the entire loan will be captured at Equifax and will result in helping improve that businesses credit score, a vital requirement that will help businesses get accepted for future loans at attractive rates.

Recent changes to the way Equifax and other agencies calculate business risk, including consideration of a wider range of credit facilities and more frequent reporting, mean business credit scores are now more dynamic and less biased by semi-annual or annual performance. This means Creditbuilder reporting can now make a meaningful difference to a company’s score, particularly for new businesses where it may be one of the few reported factors. The product will go live in early 2022.

Today, Cashplus is also launching a new market-leading Business Credit Card offering 1% cashback for UK sole traders and small businesses who often struggle to secure affordable lending. To tackle this issue, the company uses advanced underwriting techniques and a “low and grow” approach that recognises the often-modest credit needs of new businesses. The company is announcing plans to deliver £5bn of new SME lending through the product over the next five years and the ambition to lend to 100,000 new customers in the next 12 months.

Product features include:

  • £5,000 credit limit, no monthly or annual fees and 1% cashback.
  • Customers will receive up to 56 days’ interest free credit as long as they pay in full each month.
  • All transactions use Cashplus’s location-based software to provide highly accurate itemised billing to make it easier for businesses using the card to track their expenses.

The product is the first business credit card in the UK to be part of the Mastercard green card scheme, which will offer an eco-friendly degradable contactless card to customers. Cashplus has plans to further enhance the product in 2022 with new Open Banking-enabled payment functionality that will allow customers to make and receive Faster Payments using the credit card’s account number and sort code. At this point it will be the only UK credit card to benefit from the Confirmation of Payee system.

Rich Wagner, CEO, Cashplus, commented: “Many start-ups need just a small credit facility to get them on their way, but this can often be almost impossible to come by without a credit history. This product is the answer to that “catch 22”.

“We are in the business of breaking down barriers for UK SMEs and we are delighted to now be able to bring our pioneering Creditbuilder product to our business customers. The work we have done with the team at Equifax means that early-stage businesses will now be able to make a meaningful difference to their credit score and combined with our new 1% reward credit card for micro businesses creates a powerful tool for closing the £6bn SME lending gap.

“This is needed now more than ever with record numbers of new and small businesses leading the UK’s recovery from COVID-19, government support schemes coming to an end and high street banks continuing to poorly serve the SMEs that power our economy.”

Jayadeep Nair, Chief Product and Marketing Officer, Equifax UK, said: “We’re very pleased to have worked with Cashplus Bank on this first-of-its-kind Creditbuilder product. We know that intelligent use of data has the power to create powerful results for customers and the wider economy. This innovative solution is a great example of how businesses and credit institutions can get the best out of our enhanced business credit insights.”