Fleximize, the SME alternative finance company, has announced that it has now lent £4 million to SMEs since its launch in January 2014.
The company is also announcing that it has secured access to over £5.5 million in funds from investors to provide to SMEs and that it anticipates a huge increase in demand for its loans as it has joined the alternative lending portal alternativebusinessfunding.co.uk (ABF), which has recently announced its panel of lenders (now 18) have now funded an estimated 2,500 SMEs through the portal.
With a proven track record in the UK and having received interest from overseas, ABF is considering plans to be the vehicle to take the thriving alternative funding sector to overseas markets – many of which lack a range of non-bank funding solutions.
Max Chmyshuk, Founder and Managing Partner at Fleximize, said: "We are seeing huge demand for our loans, and now that we have secured more funding from investors and joined ABF, we expect to see a massive increase in business.
Adam Tavener, chairman of pensionledfunding.com, and catalyst for the ABF collaboration said: "We are delighted to have Fleximize on board at such a critical time for the non-bank funding sector. With the UK banks starting to refer to the alternative funding market this year, we are expecting huge growth for this thriving sector. Bringing on seven new funders today provides even more choice to SMEs seeking funding."
Chmyshuk continued: "Many SMEs are still struggling to secure funding from mainstream banks. Our own analysis(1) reveals that between July and September 2014, banks rejected credit applications from SMEs worth an estimated £1.44 billion. We believe this is around 28% higher than the value of SME credit rejected in Q2 2014. Over one in five applications from small businesses for overdrafts and loans are rejected by the banks, and the corresponding figure for medium-sized enterprises is around 12%.
"This unwillingness to lend is fuelling increased demand for alternative lenders. The value of SME credit applications we received in Q4 last yea year was more than double the value of Q3 applications.
"The recent Government announcement that banks will be forced to forward on the details of SMEs they reject for funding to alternative lenders will 'open up the floodgates' to new forms of lending for businesses. Our research shows that 65% of SMEs support this move."
Fleximize estimates that around 15% of the companies it has provided loans had previously been rejected by banks. It says it can provide loans to these companies because unlike some of the banks, it is not constrained by archaic systems or a back-book of bad debts. It is also using more efficient and fairer systems for assessing applications.
Fleximize offers a choice of flexible loans and revenue-based financing to small and medium sized businesses where repayments are tied to a client's revenue flow – paying back more in good months and less when income drops