Alibaba Creates UK Partnerships For Small Business Trade

Alibaba has made a move into the U.K. through an alternative lending partnership aimed at enabling small businesses’ financing options for those buying from Chinese suppliers.

To help achieve this, the Chinese e-commerce giant has tapped two U.K. startups — iwoca Ltd and ezbob — to offer financing options to small, British businesses that want to purchase goods from China, Reuters reported. This move was made to help encourage struggling small businesses a chance to benefit from the burgeoning e-commerce market in China.

This move is the first of its kind for Alibaba in the U.K., which will start by offering short-term loans to businesses. This alternative lending program is aimed at helping businesses that may otherwise not have the means of securing financing.

“We want to make financing as easy as possible for the millions of British companies that do business through Alibaba.com,” Wei Duan, Alibaba.com’s European marketing and business development director, told Reuters.

So how is the different then the P2P marketplace Lending club? Reuters indicated that the two U.K. firms, which already work with Amazon and eBay, would be personally backing the loans. As its name implies, iwoca stands for “instant working capital,” which demonstrates exactly how the service will work: to provide working capital to small businesses, instantly. According to Reuters’ report, the two U.K. firms will provide micro-loans starting at roughly $75,000 (50,000 pounds), depending on each applicant’s qualifications. They will be given loans at monthly interest rates between .75 percent and 2 percent.

This step into the U.K. is a logical one for Alibaba, as Reuters’ reporter Edwin Chan points out that Britain is a major market for China’s e-commerce leader, as it’s used “primarily for business-to-business goods sourcing on Alibaba.com.”