Tech CEO: MarketInvoice – Invoice finance, the trigger for growth?

Tech CEO: MarketInvoice - Invoice finance, the trigger for growth?

Anil Stocker, CEO of Market Invoice, talks to Accountancy Age about how technology can help change the perception around invoice finance.

Tech CEO: MarketInvoice – Invoice finance, the trigger for growth?

What is MarketInvoice?

We’re a business finance company that helps small businesses and entrepreneurs get access to capital, fuelling their cashflow. We use our technology and our people to deliver finance solutions which enable entrepreneurs get on with what they’re passionate about, taking their mind off finances.

We started back in 2012 with a selective invoice finance product. This enabled business owners to get instant funding against any given invoice they were waiting to be paid on. So, let’s say you’ve got £100,000 invoice on 90 day terms, you can come and put that on our platform, we do a credit underwriting risk assessment in real time, and you get a credit decision within 24 hours. We advance up to £80,000-£90,000 immediately, determined by our risk model. On day 90, you get the remainder, less a fee. It’s a as simple as that.

Today, we’ve funded over 100,000 invoices and have advanced more than £2.4b in lending to UK businesses. We’re proud to have support companies across the UK who are making an impact in their communities, industry and for the country.

Why did you start MarketInvoice?

In the heart of the financial crisis, I saw that access to cash was really, really difficult for businesses. All these companies were being held back by the fact that they couldn’t get funding, but also their end customers went from paying them 30 days to 60 days to 90 days, because in a in a credit crunch, people delay their payment terms. So, it was like a double credit crunch for these companies, squeezed by traditional lenders and their debtors.

Simultaneously, I saw how the internet was reshaping so many industries and strongly felt that it would to do the same to finance. With my co-founders, we brought the tech to finance and that gave rise to MarketInvoice. Obviously, you’ve seen since then, wave after wave of the fintech, online lenders, effects companies, and the digital Neo banks, and now even going into things like blockchain. We are just at the start of massive, massive change.

Why is invoice finance so important to business?

There are many companies out there who are very profitable businesses, but it’s the cash flow that stalls them. Take the example of a fashion company which makes products in China then sells into UK high streets. Their crunch point comes when they need to put cash down at the factory, they need to pay the shippers and need to pay all these bills for the clothes to arrive at the end destination. What these fashion companies can do once they’ve shipped the clothes to Miss Selfridge, or boohoo or ASOS, they can take those invoices, get the cash quickly, and use that to pay bills and put deposits down for the next season’s clothes.

It really powers their ability to grow, take bigger orders, keep their suppliers, happy, and pay their staff.

But it’s been negatively perceived because it’s difficult to understand, it’s clunky, it’s requires a lot of work, it’s expensive. We’re trying to make it digital and very easy to use.

Why does invoice finance have this negative perception?

Factoring or invoice discounting as it is also known has been around for a long time. I think in the past it has been viewed negatively because people have thought that this is something of a “means of last resort” for businesses trying to find funding or that this would sully their reputation with their customers.

But I think there’s been a shift in mindset because people, especially younger generations of entrepreneurs, have realised that this is such a powerful way to grow the business and the rates have come down. It’s a much better way of growing your business than just taking on unsecured debt, which you have to pay back in five years, and which is not linked to any kind of revenue.

It’s also much better, much cheaper than raising equity.

Where will it help most?

It’s a problem throughout the chain. The big companies have all the power, they dictate terms of the top of the supply chain, and then it cascades down. It’s most pronounced when you have a small company dealing with a very big company, because the balance of power is very unequal. It also affects companies that have got stuck between big customers.

How will emerging technology like MarketInvoice impact accountancy?

The day-to-day accounting, bookkeeping functions are becoming increasingly commoditised. Because there’s a lot of technology that takes over a lot of manual tasks, this frees up time for the accountants. Time is a critical asset for this industry. Now, accountants can become a lot more value-add about how they’re spending their time.

Whether that’s helping companies automate certain processes around receipts or document handling or keeping organised. But the big thing is funding and finance. Because all businesses, all entrepreneurs always remember who helps you get access to funding, because there’s so many people who say no. You always remember who invested in your seed round, you always remember the first who gave you your credit card or overdraft. You remember the person that gave you your first term loan.

If an accountant can come and say, ‘look, we work with some best in class fintech providers. So, check them out, it’s essentially something that can be useful for you.’ That is very value add. Accountants will become more partners of businesses, rather than just service providers.

How do you see accountants’ attitudes to technology changing?

It’s interesting because there are those early movers within the accountancy space, some based here in Shoreditch, using the latest technology, completely ‘getting it’ and have been referring us to businesses that need invoice finance. But, then we meet accountants focussed on their core offer and are happy with keeping things ‘business as usual’.

One big recommendation I would have for accountancy firms is to let someone in their business become a ‘change agent’. This person would educate themselves on the available apps or tech opportunities for them and their clients and think about how they can push up more into the client base. This could also become a very big revenue generator for accountants.

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