5 innovative FinTechs in the UK lending ecosystem

By Megha Bhattacharya

The UK Lending FinTech ecosystem is brimming with disruptive companies. FinTech lenders employ the latest technologies to streamline the traditionally out-of-date and non-transparent lending process. FinTech has allowed lenders to power and accelerate their payment processing time and offer personalized experiences based on each loan and mortgage seeker’s needs.

Check out the 5 FinTech lenders that have constantly been innovating and boosting their market presence in the UK-

1. OakNorth

OakNorth Bank is a UK bank for small and medium-sized companies that provides business and property loans. The FinTech, recently, received an approval for an additional CBILS allocation by the British Business Bank. The Bank has approved over £600 million in new loans to support British businesses since the lockdown began on 23 March, including £220m through the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

The bank, which gained regulatory approval in early 2015, was founded by entrepreneurs Rishi Khosla and Joel Perlman, who had previously founded Copal Amba. In 2019, the bank’s pre-tax profit was £65.9m, a 95% jump from 2018.

OakNorth Bank aims to provide flexible and accessible debt finance (from £500k to £50m) to fast-growth businesses and established property developers/investors. It has debt finance teams in London, Manchester, Bristol, Birmingham, Leeds, and East Anglia.

2. Iwoca

iwoca is an online FinTech company based in London. It offers credit facilities to small businesses trading in the UK and Germany via an automated lending platform. Iwoca recently secured funding via the government’s Future Fund scheme, a funding program that aims to offer high growth firms with an opportunity to match third party investments of up to £5 million by subscribing for convertible loans issued by such firms.

The FinTech lender announced this month that it would be reaching out to the CEOs of UK banks in a bid to urge for a partnership with the lender for offering SMBs with better access to finance via the CBILS program. It aims to call upon the UK banks to refer to businesses that have been waiting for more than two weeks to receive feedback on their application.

Founded in 2011 by Christoph Rieche, CEO and James Dear, CTO, iwoca provides loans of up to £250,000 to small and micro businesses via its website and through its lending API and Open Banking, using digital solutions to slash the time and paperwork required to approve funds.

3. B-North

UK-based B-North aims to deliver an outstanding borrowing experience for SME businesses and intends to offer competitive savings products to UK retail consumers and business customers.

The SME lending bank recently selected Wiserfunding as its risk grading partner to speed up credit profile assessments of SMEs and support B-North underwriters to make better lending decisions. B-North utilises Wiserfunding’s prediction solution alongside traditional human underwriting methods.

The Manchester-based lender partnered with the RegTech platform TruNarrative to facilitate enhanced customer onboarding, compliance capabilities, and faster business lending. The integration follows B-North’s partnership with Mambu for core banking solutions and with nCino for loan origination workflow.

4. Funding Circle

Funding Circle is a peer-to-peer lending marketplace provider that allows the public to lend money directly to small and medium-sized businesses. The UK-based small business loan platform recently teamed up with Starling Bank to offer £300 million of loans to SMBs under the Coronavirus Business Interruption Loan Scheme (CBILS).

In April, Funding Circle became the first P2P lending platform to be accredited to deliver CBILS. The platform paused all non-CBILS lending from retail and institutional investors to focus on supporting the scheme until further notice. It was approved to deliver emergency funding to small businesses in the US impacted by Covid-19.

The platform was accredited by the country’s Small Business Administration (SBA) and the US Treasury to originate loans under the Paycheck Protection Program (PPP), which are 100 per cent guaranteed by the SBA.

5. Funding Xchange

Funding Xchange is an SME lending marketplace and intelligent decisioning platform that serves over 10,000 customers a month. Founded in 2014, Funding Xchange aims to bring transparency and efficiency to small business lending. It refers small businesses declined credit by their bank to other sources of funding.

It recently announced the appointment of various advisors to its board in the light of its upcoming launch of Credit-as-a-Service proposition for banks and lenders. Funding Xchange and Experian announced the launch of an online service for banks in a bid to enable businesses, affected by the pandemic, to check if they are eligible for loans. The newly released service is expected to provide an instant assessment of funding applications submitted by businesses and provide information on the loans the companies are eligible for.

The company focuses on bringing about efficiency in SME lending distribution by holding lenders’ underwriting models and integrating with their decisions. Funding Xchange mirrors lenders’ decisions based on their credit policies, affordability models, and risk pricing.