By Aisling Finn on Thursday 16 April 2020
The new service gives members protection for 90 per cent of the invoice value up to £20,000.
Tide, an SME-focussed banking platform, has today announced a partnership with insurance solutions provider Hodoko to offer invoice protection for SMEs.
Smaller businesses are set to be some of the worst affected by the coronavirus pandemic and the new collaboration hopes to provide SMEs with a safety blanket to ensure as many stay afloat as possible.
Users of the new platform can choose which invoices they want to protect, up to the value of £20,000 and will have to pay a small fee, between 0.3 per cent to 1 per cent of the value of the invoice.
Amit Kahana, VP of credit services for Tide, said: “Our research from late 2019 told us that UK SMEs are chasing a total of £50bn in late payments at any one time, and spend 1.5 hours per day chasing these invoices.”
The partnership will also give SMEs an insight into their customer’s financial health as they will be able to assess risk, improve their credit and still be able to take on new business despite the economic uncertainty.
Richard Thornton, co-founder of Hokodo, said: “As the impact of Coronavirus continues to intensify, many SMEs will be worried about what the next few months will bring, whether they’ll receive payment, and whether they or their clients face the risk of insolvency.”
“Invoice protection can help small businesses avoid financial distress and provide them with some peace of mind, particularly in times of crisis such as these, by guaranteeing payment of invoices,” he added.
There is no threshold for companies to use the platform, however, a spokesperson for the company confirmed that sole traders cannot use the new service.
To help SMEs navigate this tricky time, Tide has also built an 'Eligibility Tracker' to help SMEs work out the amount they can receive from the Government under the Coronavirus Business Interruption Loan Scheme (CBILS).