LONDON, April 13, 2011/PRNewswire/ — An innovative, disruptive new financing marketplace has launched to help UK SMEs access working capital. Based in Old Street, London, Marketinvoice is the UK’s first online trading marketplace allowing businesses to selectively sell the outstanding invoices of large corporate customers to raise flexible working capital. Businesses can register on Marketinvoice, and then auction invoices due to be paid in 30, 60, 90 days, receiving cash in advance from global investors who compete to provide competitive funding, guaranteeing SMEs the lowest cost of finance.
Marketinvoice is currently fully operational with 10 businesses already using the marketplace to raise flexible working capital. These businesses are in the recruitment, consulting, IT software, and wholesale industries, with many more businesses looking to join from sectors including marketing, film production, accountancy, outsourcing, research, import/export and advertising.
Cash funding for SMEs is provided through competitive auction from a wide range of institutional investors (investment funds, asset managers, family offices, high net worth individuals). Marketinvoice brings new capital into this market by creating a standardised and secure trading environment. It encourages those SMEs that do not wish to enter into traditional factoring due to cost, contractual, and reputational concerns, to selectively use the competitive marketplace at times when short-term funding is desired or required. Importantly, using Marketinvoice is completely confidential to a business’ end corporate customer and no notification is necessary. Businesses maintain control of their invoice collection procedures and customer relationships.
Marketinvoice aims to alleviate the problem of the “double credit crunch”. SMEs, striving to grow as the economy recovers, are squeezed between a problematic borrowing environment, and their large corporate customers, many of whom burden SMEs with unilaterally extended payment terms. Some of the most problematic customers are those large companies who were acquired by private equity firms during the boom years. Additionally, Marketinvoice is helping a number of start-up firms, who rather than sell expensive equity to fund working capital, can use Marketinvoice.
The Marketinvoice model
– In contrast to traditional factoring, on Marketinvoice, pricing is transparent, flexible and transactional, there is no contractual lock-in, there is no obligation for businesses to auction all their invoices, and personal guarantees are not required.
– This means that there are significant advantages for SMEs: mainly, high advance rates and low fees (including the absence of often very significant monthly minimum fees). This is because companies use Marketinvoice when they want, only choosing to raise finance against invoices they choose to sell, not their whole turnover.
– In addition, personal guarantees are not required, and there is complete confidentiality – unlike in factoring, customers are not notified that the receivable has been sold.
– Extended scope (investors registered on Marketinvoice are prepared to buy invoices not typically accepted by many factors and banks)
– Using Marketinvoice, young/start-up businesses, can avoid the need to give up valuable equity to fund working capital
– A disruptive innovation that draws upon successful implementation of similar models in the United States. Never before have non-bank asset managers been able to acquire SME corporate invoices in a centralised and secure online marketplace, opening up new sources of funding and allowing SMEs to drive down the price of their funding,.
Marketinvoice successfully raised over $1m in seed funding from a selection of angel investors and former entrepreneurs in September 2010. Backers include Rumi Verjee – the Founder of Domino’s Pizza in the U.K. and former owner of Watford Football Club, Ivan Levy, the founder of Body Shop France/Switzerland and Martin Gill, technology entrepreneur, founder and CFO of Conduit Communications, a software and web development company, acquired for over GBP150m.
– Further materials including SME case studies available on http://www.marketinvoice.com/press/
Leave a Comment
You must be logged in to post a comment.