Funding Options utilising Open Banking to reduce loan application times for businesses

Adam Cox
09 Apr 2020

Source: Funding Options

Funding Options, the marketplace for business finance, is now using Open Banking to make it quicker and easier for businesses to access finance. Businesses applying for finance will see their application time reduced from days and hours, to just minutes as they will no longer need to source original bank statements. Around 20 lenders have agreed to consume the Open Banking data as part of their analysis for credit decisions. These include Just Cash Flow, YouLend, Liberis, iwoca, Newable, and White Oak UK.

To date, around 200 UK finance providers are enrolled in the UK’s Open Banking scheme, meaning the potential for expansion is huge. There is an opportunity for the industry to come together and unlock data, which can streamline access to finance and extend the choice of providers for SMEs, allowing for fast and secure access to funding. In the current health crisis, this will be of the utmost importance.

Last week, the Chancellor overhauled the Government’s Coronavirus Business Interruption Loan Scheme (CBILS) after claims that many businesses were being denied the government backed loans, and that it was taking too long to deliver the funds. Open banking can help deliver funds more quickly to businesses whose cash flow and revenue have been disrupted.

By partnering with AccountScore for Open Banking and driving a strategy of API connectivity with our lender partners, Funding Options can minimise the amount of work applicants and lenders need to do to approve a credit application. For applicants, they will no longer need to send documentation to lenders. Instead, thanks to open banking APIs, Funding Options can immediately make their transaction history available to lenders, in a safe and secure manner. As all the data is standardised, it’s easy to share with multiple lenders.

For lenders, they will be able to make decisions based on the standardised data much quicker than through the traditional methods. It will also move the financial services industry towards being able to pre-approve businesses for loans based on real time data.

Simon Cureton, CEO at Funding Options, says:

“Open banking has the potential to transform the business lending landscape, improving the experience for the customer while also improving security and response times for lenders. We’ve already seen a number of customers using the platform and successfully receiving loans which highlight the value and benefit from shared data. In the face of the current health crisis, when access to finance is vital for the survival of many businesses, reducing the time it takes to go from application to draw down is of paramount importance.

John Davies Exec Chair and Founder of Fintech Lender Just CashFlow Plc said:

“I couldn’t agree more with the comments made by Simon but the time saving isn’t just about uploading hard copies (which are easy to forge) but also the analysis that can be done on those statements using Accountscore’s dashboard which cuts hours from manually checking them and is clearly more accurate. We applaud Simon and his team for innovating and making it easier for Borrower and Lender alike and we look forward to further partnering with Funding Options with the projects they have in the pipeline.”