Online working capital solution to give UK SMEs access to same day funding

New service proposal to be powered by leading online lender, Kabbage, to speed underwriting decisions through its data and technology platform.

5.4 million UK SMEs now able to access billions of working capital online around the clock.

For the first time, small and medium sized enterprises (SMEs) in the UK would have access to a new working capital solution from a mainstream bank which provides approval for funding between £500 and £100,000 within a matter of minutes and access to the funds within a day – a process that currently takes between two and 12 weeks. The solution from Santander, to be made available exclusively online, would leverage the powerful Kabbage Platform to accelerate automated SME lending, and enable customers to draw down a line of credit as often as once a day.

Nathan Bostock, Chief Executive Officer, Santander UK said: “With SMEs comprising 99% of the UK private sector, having fast and secure access to funds would ensure they can continue to make an important contribution to the UK economy. Our collaboration with Kabbage aims to provide UK businesses with the ability to draw down funds as and when required, whether this be covering a short-term funding need or enabling them to seize growth opportunities as they arise.”

The working capital loan would be one of a number of options Santander offers SMEs to help them manage cash flow including overdrafts, Invoice Finance, Asset Finance, equipment finance, and Fixed Term Loans. This provides another option for small businesses, helping them find the solution that is most appropriate to their needs.

To automate and accelerate decisions, the Kabbage platform uses a risk scoring methodology determined by Santander UK’s credit experts, together with a body of knowledge gathered through Kabbage’s experiences in other territories. Kabbage also references multiple external sources including credit ratings, social media, payments providers, online marketplaces and the SME’s bank account history, both from Santander and other bank accounts held by the SME.

It is proposed to soft launch the online working capital service over the next two months to a group of Santander customers. The pilot period will be used to gather data driven feedback on both the customer experience, and further refine the performance of the credit scoring algorithms determining lending decisions.

Sigga Sigurdardottir, Chief Customer & Innovation Officer, Santander UK said:  “The strengths of the Kabbage platform lies in terms of real-time risk modelling and its extensive capabilities to cross reference data against multiple sources. When added to our own customer base, trusted reputation, UK payments infrastructure and understanding of the requirements of UK businesses, this creates a powerful proposition.”

Kathryn Petralia, Chief Operating Officer, Kabbage, said: “We are excited by our collaboration with Santander, who has demonstrated a strong appetite to go further than a standard conversation around innovation in the financial technology landscape. Today’s announcement underscores the institution’s desire to present a technology and data-driven solution, quickly, to its customers. It’s great to work at pace and push the boundaries in order to build a better service for UK businesses.”

The new service follows an investment in Kabbage in October 2015 by Santander InnoVentures, the corporate venture capital business of Santander Group. Santander InnoVentures mission is to invest in emerging fintech businesses which offer innovative technologies that can contribute to improving services to Santander customers.