U.K. challenger bank Starling Bank is introducing a new solution designed to help its small business clients mitigate against the risk of invoice non-payment.
In a blog post Thursday (Oct. 10), Starling introduced its collaboration with invoice insurance platform Nimbla. The bank pointed to the risk small businesses face if their client goes out of business as a major cause for unpaid invoices, highlighting the recent collapse of Thomas Cook that left invoices from its vendors, including landlords and hotel groups, without pay.
Pointing to data from Insolvency Service, Starling also noted nearly 17,500 corporate failures last week, with small and medium-sized businesses (SMBs) struggling with late invoice payments as a common factor behind those business failures.
Starling will connect its SMB clients to Nimbla’s invoice insurance offering, which allows companies to obtain a credit-checker tool within the Starling Marketplace to assess financial risks of existing and potential new customers. Nimbla will also connect those businesses to insurance for a single or multiple invoices, enabling a company to obtain up to 90 percent of an invoice’s value should that bill go unpaid.
“Hard-working [SMBs] deserve access to affordable, fast and flexible protection that will help them expand into new and existing markets, secure invoice funding and safeguard against insolvent customers,” said Nimbla CEO Flemming Bengtsen in a statement.
Starling CEO Anne Boden added, “Nimbla is a great example of a business that is disrupting an old industry model to create products that are relevant to the way we do business today. They’re an excellent addition to our Marketplace that I’m proud to welcome into the fold.”
Starling added that Nimbla’s offering within the Starling platform is also able to exist with other back-office software, including other Starling Marketplace members Xero and FreeAgent. Those integration capabilities are a “further testament to the power of open banking,” Starling said.