The platform’s CEO tells AltFi that partnerships are now its “primary” means of origination.
Leading merchant cash advance firm Liberis has closed a £57.5m fundraise, which includes both debt and equity capital.
British Business Investments, the commercial arm of the British Business Bank, is providing Liberis with a new facility, as is Paragon Bank. Meanwhile, BCI Finance has extended terms on its mezzanine line with the platform.
At the same time, Liberis has secured further equity investment from majority shareholder Blenheim Chalcot, a digital venture builder. The exact breakdown of the fundraise is at this stage unclear.
Liberis is arguably the UK leader in the merchant cash advance market. Its loans – which target smaller businesses than the banks and even fellow fintechs tend to go after – are repaid as a daily, pre-agreed proportion of future credit and debit card sales. Liberis says that its services are especially suited to seasonal businesses.
“In the foreseeable future, we can see that partnerships are going to play a massive role for Liberis. Origination through those partnerships is more intuitive and cost effective, both from a customer perspective as well as from a lender perspective,” he said.
Through such partnerships, Liberis’ customers enjoy a more “frictionless” experience, because there’s already a trust relationship, explained the Liberis boss. He said that partnerships enable the platform to offer “one-click lending”.
Liberis estimates that this fresh round of fundraising will help to support 100,000 jobs by 2020. To date, the platform has funded more than 7,000 small businesses, equal to roughly £210m in cumulative funding between 2007 and 2018. It estimates that it has supported over 35,000 jobs in that time.
In tandem to the fundraise, Liberis has announced a partnership with Newable Business Finance, a designated Responsible Finance Provider.
“We have a joint venture with Newable, called Newable Business Finance, where Liberis has been instrumental in developing the automated platform and providing the analytical data behind the lending decisions. Newable is a designated Responsible Finance Provider with a long track record of building business confidence, and they have been lining up the social capital behind it enabling Newable Business Finance to offer longer term capital from £25k to £150k to small businesses,” explained Straathof.
He added that this partnership should eventually lead to Liberis offering longer term business loans.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.