B2B Payments

Alt Lending Milestones, Underbanked SMEs, And A Rough Week For Employees

It’s been a stellar week for a few alternative lending platforms, and, conversely, a pretty rough one for employees. Alt financing players hit new milestones in lending volumes, but new data emerged signaling the struggle for small businesses dependent on personal credit products.

Plus, stats came out highlighting the role that limits on employee spending plays to control corporate budgets. But the demographic having the worst week is also the one for which the data is largely unavailable – the ongoing RushCard fiasco that may bring new criticism against the prepaid payroll card industry.

[bctt tweet=”It’s been a stellar week for alt lending platforms, and a pretty rough one for employees.”]

Here are the numbers:

Alt Lending Milestones

 

$1 Billion: That’s how much working capital alternative lending platform C2FO funneled to borrowers in a single week in Q3 2015, according to a company announcement last Monday (Oct. 19). It marks the first time the supply chain finance firm has handled such volume, C2FO said in its quarterly report. Other benchmarks include the $8.7 billion in total loans issued in the quarter (five times what it handled the same period last year), and 150 million days worth of faster payments as a result of the money issued thanks to its early discount program, which sees corporate buyers getting a discount for their purchases when they settle an invoice earlier than its due date. The stats are impressive, but not altogether unexpected; C2FO announced last April that it expects to soon process $1 billion of outstanding invoices on a weekly basis.

$110 Million: The amount of asset-backed financing provided to business borrowers on the P2Binvestor platform since its launch in May 2014. The company uses a crowdfunding model to connect investors with businesses in need of financing. According to a company announcement last week, P2Binvestor’s growth stems from the launch of Ex-Factor, its new line of credit, as well as “Lending Hub,” a mobile-friendly platform for borrowers. According to P2Bi CEO and co-founder Krista Morgan, the $110 million milestone “speaks to the huge need for a technology-driven product.”

Small Biz Struggles

 

One-In-Eight: The number of small businesses across the U.K. that turn to personal credit cards to fund their small business. That figure, equal to 13 percent, means that businesses in the nation are concerned about their cash flow, according to analysts at Santander Corporate & Commercial, which conducted the research released last week. Their SME Access to Finance study reported that many small business owners are also flying blind when it comes to accounting – 8 percent have reportedly never reviewed their finance requirements to calculate how much money they need to remain stable or launch new ventures. Nearly half of small businesses (43 percent) said they are either concerned or very concerned about their cash flow for the next year.

Interestingly, while the largest problem cited by small businesses in the survey is late- and non-payments by their corporate buyers – and issued cited by one-quarter of survey respondents – only 5 percent said they have accessed invoice financing services in the last year.

Employee Frustrations

 

$76.6 Million: The value of savings the British Broadcasting Company (BBC) hopes to attain by tightening the rules of corporate travel and expenses. The amount, equal to £50M, emerged after reporters last week saw an email memo sent to staff of the media corporation by Managing Director Anne Bulford. Amid a £150M “budget shortfall,” she said, employees will be asked to pay out of pocket for some of their expenses incurred on the job. That includes lunch, alcohol, trains and taxi rides. Employees are encouraged to take public transit when possible, and new limits are proposed for employees traveling by plane. Cracking down on employee spending is necessary for all businesses, but we’re sure BBC staff are still none too pleased by the news.

No One Knows, Exactly: The number of people who couldn’t access their paycheck funds last week. Perhaps the demographic having the worst time in the last seven days are the underbanked employees that use Russell Simmons’ RushCard prepaid card products to access their paychecks. The card product, which champions itself as a financial tool for the underbanked, and a way for users to access funds from their paychecks up to two days sooner, was hit with a major technical malfunction last week. RushCard kept the details of the issue secret, so no one knows exactly how many users were affected when a glitch prevented customers from accessing any of their funds. But according to reports, it was probably a lot: NPR recently interviewed The Atlantic’s Gillian White about the story, who told reporters that “it sounds like pretty much everyone who has a RushCard was affected. So we are talking, probably, hundreds of thousands [of users].”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Digital Fraud Tracker Report

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