B2B Payments

Invoice Finance Platform To Cover (Some) Investor Losses


As skepticism over the vitality of the alternative lending space grows, one marketplace lender in the invoice financing sector is looking to quell any investor anxiety. Platform Black announced on Monday (June 6) that it will underwrite the first 10 percent of every invoice auction that takes place on its site, meaning it will cover the first 10 percent of any losses faced by an investor.

The policy was implemented June 1, reports said, but not announced until now.

“I stand by my belief that, if I wouldn’t put my own money into an auction, then I wouldn’t expect an investor to do so either, so from 1 July, we will be the first to invest in every auction,” said Platform Black Managing Director Caroline Langron, explaining that the company will also contribute a 1 percent financial invoice in every invoice auctioned through the site.

Platform Black allows companies to upload their outstanding invoices to the platform, on which investors bid so businesses can access working capital instead of waiting to get paid.

The business model and others in the marketplace lending space have earned some criticism because they act as middlemen without taking on any risk, as their investors do.

In response to Platform Black’s move, another marketplace lender, Investly, expressed support and pointed to its own, new efforts to share in the risk with investors on its invoice financing platform.

“Our bids will be made with the username Investly so that they are visible and recognizable to all investors,” the company said. “Our bids will range from 5–33 percent of the invoice funding target.”



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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