Barclays is the next traditional financial institution to strike a partnership with an alternative lender, announcing Thursday (Aug. 2) that it has invested in small business lending platform MarketInvoice.
An announcement on the MarketInvoice blog said Barclays’ investment makes the bank the first High Street FI to partner with the FinTech. In addition to acquiring a minority stake in the alternative lender, MarketInvoice will integrate its invoice financing solution into Barclays’ offering. The tie-up is part of Barclays’ larger initiative to enhance its small business financial services.
Small businesses can sell unpaid invoices by uploading them to the MarketInvoice platform, where investors can choose which to invoice. Barclays will roll out the offering to its small business customers in the coming months, the bank said, with a full rollout across the U.K. next year.
Barclays said it also plans to eventually finance some of the invoices uploaded to MarketInvoice.
“It’s easy to forget that the companies you see on the FTSE 100 all started as small businesses with founders following a passion,” said MarketInvoice CEO Anil Stocker in a statement. “In focusing on the needs of these entrepreneurs, through this collaboration, Barclays and MarketInvoice will truly transform the experience of U.K. companies in sourcing finance.”
“Invoice finance is a product that has come of age in the digital era,” added Barclays Business Bank CEO Ian Rand.“It’s efficient, effective and controllable for small businesses.”
Rand said some small business customers have expressed that they “feel pressure” to provide their business customers longer payment terms. “This ties up their cash flow, preventing them from seizing growth opportunities,” he said. “Invoice financing gives small businesses the power to obtain funding in a fast and innovative way, and capitalize on those moments.”
Rand noted that Barclays already offers invoice financing to larger corporates.
MarketInvoice previously announced a partnership with NatWest bank, which also sees the FI linking its small business customers to MarketInvoice’s invoice financing offering.