Pension fund-owned lender Fiduciam is set to purchase £50m of invoices each year, but can stretch that figure to £200m per annum depending on the balance of supply and demand. Due to the inherently short average life cycle of invoice finance trades (40 days), AltFi Data estimates that the £50m a year funding commitment will in fact equate to a total of £5.5m being deployed on the platform at any one time. At the upper limit of the agreement (£200m a year), roughly £22m be will be put to work on a revolving basis.
MarketInvoice has lent just shy of £350m since inception. The size of the Fiduciam deal is a clear indicator of the platform’s expected growth. AltFi Data predicted at the start of the year that MarketInvoice would fund a grand total of £315m invoices over the course of 2015, giving the platform a year-on-year growth rate of 53%.
Johan Groothaert, Director at Fiduciam, commented on the investment:
“We are pleased to provide an important additional funding facility over the MarketInvoice platform during this period of scarce bank credit. We’re excited to help UK businesses accelerate their growth through MarketInvoice.”
“MarketInvoice carries numerous benefits over other forms of peer-to-peer investments. The loans are short-duration meaning there is no reliance on a secondary market, and because investors take ownership of the invoice, the loans are well secured in cases of default.”
MarketInvoice is steadily building a diverse mix of capital suppliers. The Greater Manchester Combined Authority committed to funneling £16m through the platform in November last year, and the British Business Bank is also an investor. Anil Stocker, Co-Founder and CEO of MarketInvoice, summarized:
“For centuries only banks could access outstanding invoices as an investable asset, but for the first time we’ve made the asset class available to private investors and investment institutions, now including international pension funds - which in total represent over $30 trillion in assets under management – following the deal with Fiduciam.
“Our investment proposition is different from other peer-to-peer lenders as the loans are short-term, this means we have a track record of thousands of successfully matured loans – our model is the most proven in alternative finance.
“Our partnership with Fiduciam means they join a growing list of MarketInvoice investors that also includes the British Business Bank and the Greater Manchester Combined Authority, as well as private investors, hedge funds, family offices and pension funds. The funds will enable us to help even more UK business accelerate their growth.”