The new tool is aimed at increasing lending access to the 65% of new U.K. businesses who are denied access to credit. The feature is available as a no-charge add-on to fee-based Cashplus business accounts.
“The feature will structure the customer’s monthly account fees as an interest-free loan,” according to the release.
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There is an estimated lending gap of 6 billion pounds ($7.9 million) between SMBs’ need for credit and what’s available to them, according to independent research commissioned by Cashplus. Cashplus aims to help these SMBs with Business Creditbuilder, a new take on the Cashplus Creditbuilder for consumers, which is used by more than 200,000 people. Even after launching 13 years ago in the U.K., Creditbuilder for consumers continues to be in demand.
The company’s collaboration with the credit reference agency Equifax has delivered a product for SMBs by leveraging a 1-year fixed-term loan that is payable over 12 months at 0% interest. The repayment will be used by Equifax to help boost credit scores.
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Rich Wagner, Cashplus CEO, said that many new businesses need some credit to launch but can’t get it because they don’t have a credit history. “This product is the answer to that Catch 22 … We are in the business of breaking down barriers for U.K. SMEs.”
He added that the company’s “pioneering Creditbuilder product” with Equifax will bring early-stage business customers a product that will make a “meaningful difference to their credit score.”
Cashplus also set its sights on delivering 5 billion pounds ($6.6 billion) of new SMB lending through the product over the next five years, with a goal of making loans to 100,000 new customers in the next 12 months.
