High cost, slow access to credit will threaten business survival if lenders don’t urgently adjust their lending operations

Trade Ledger urges banks and lenders to upgrade their business lending operations to ensure they can support – and retain – business customers while managing risk exposure

London – 7th September 2022 – As the latest market data underlines the ‘cost of doing business crisis’, Trade Ledger, the FinTech focused on shaking up business lending through data-driven tech, is urging traditional working capital providers to accelerate their digital transformation plans. Trade Ledger believes this is critical to ensure lenders can adequately support businesses through what is likely to be a very challenging economic environment.

“The current business lending model is definitely not fit for purpose in the face of the current economic challenges,” said Roger Vincent, Global VP of Sales at Trade Ledger. “And the reality is the depth of data on business performance is now so much richer than in 2008 at the time of the last recession.

"That means lenders can now lend with greater confidence, and offer specialist working capital facilities like invoice finance and asset-based lending more quickly and cost-effectively than ever before, so that business owners don’t need to resort to personal overdrafts or credit cards in times of need.

“Our latest report – Next-generation working capital – the $ multi-trillion opportunity – sets out the framework lenders can apply to transform their business operations and unlock the next-generation of working capital solutions for their customers. By utilising real-time business data supplied by the customer as well as other reliable sources – rather than relying on outdated accounts and annual reports – the right facility can be offered in a digital application process which is fulfilled in a few hours. For businesses that need assurance of finance – and whose lender understands that need – it will make a real difference to new customer acquisition and retention.”

The EY Report, The five-step journey to SME banking transformation, highlights the risks to customer retention of slow lending processes. 52% of small businesses quote the application process as a main reason for dissatisfaction with the current lending process. And speed of response is critical, with 1 in 2 saying they would like to be funded within 7 days, and 1 in 3 within 3 days. 

Trade Ledger is a leading global technology provider for the commercial banking and financial services industry. Its lending-as-a-service (LaaS) capability helps banks unlock all types of working capital and business lending products for all types of business.  Crucially, the Trade Ledger platform enables a lender to rapidly aggregate application, accounting and business credit data in order to achieve significant improvements in the speed of application processing and underwriting while continuing to effectively manage risk.   

It also goes to the heart of age-old bugbears of business borrowing. Real-time pre-screening, which can be completed in minutes, provides instant eligibility on a lender’s business finance products, rather than the customer having to collate information and spend time filling in forms only to discover they are not eligible. And by directly accessing data from accounting software packages, bank accounts and business credit insight agencies, lenders such as Virgin Money are reducing a 5 day application process to 20 minutes. 

“Right now it’s vital we reimagine the process that businesses go through to get a working capital facility in place so that they are well supported over the coming months,” added Roger Vincent. “Our platform can help lenders offer the right product to their business customers, in an efficient process that reflects the critical on-demand nature of working capital right now.”