Funding Xchange and Experian have launched an online service for banks so businesses requiring funding during the Covid-19 pandemic can check if they meet their lending criteria.
The service instantly assesses funding applications from businesses and informs them of which loans they meet the lending criteria. It covers both CBILS (Coronavirus Business Interruption Loan Scheme) and other loans. Once a business has chosen a loan, it digitally completes the application process for them.
Funding Xchange’s data shows four in five of business loan applications don’t meet lenders’ qualifying criteria, for reasons including the amount requested or the company’s location.
Businesses can use the service to find out if they are eligible for funding from their own bank, or more than 40 other lenders who are offering finance. Funding Xchange and Experian are currently in talks with major banks across the market.
The service is free for applicants to use and is never more expensive than going direct to a lender. Businesses will be able to understand if they meet the qualifying criteria for a loan so it’s worth making an application, reducing the time spent by both applicants and lenders on unsuccessful applications.
Katrin Herrling, Co-Founder and CEO of Funding Xchange, said: “We are delighted to be working with Experian to provide a solution to alleviate the pressure on banks and help small businesses get the funding they need at this critical time.”
James McGarva, Managing Director of Business Information Services at Experian, said: “Businesses have no time to lose in getting the funding they need to keep their company afloat. The Covid-19 pandemic has spiked demand for finance at a time when banks have been forced to close their doors and many staff are unable to work. We’ve worked with Funding Xchange to connect businesses in need of finance with the lenders who can help them through this crisis.”
The government has moved to address the cashflow crisis that 20%* of businesses are facing in April. However, since the launch of the Chancellor’s Coronavirus Business Interruption Loan Scheme (CBILS) some banks have experienced a 40-fold increase in the number of enquiries at a time when staffing levels have been affected by the pandemic and branches are closed.
This has left banks with a backlog of funding queries. The added assessments required under the CBILS scheme has led to the creation of offline processes which further slow applications. Businesses who can’t wait for a lending decision then go on to make additional applications elsewhere, exacerbating the problem.
To reduce and manage the operational challenges banks and lenders are facing, Funding Xchange and Experian have worked together to create the online portal. It uses Experian’s Commercial Acumen to help businesses gather and submit transactional data, including management accounts. Funding Xchange’s marketplace capability instantly assesses eligibility for available solutions and surfaces indicative offers, so combined it provides a co- branded solution to help banks triage CBILS enquires.
The solution allows businesses to complete an online application journey to assess their eligibility in minutes for both CBILS and non-CBILS finance. It works out of the box for lenders and does not require technical integration.