Funding Options scans the market, working with other lenders, to find the business finance options to best suit the customers' needs
This commercial finance broker operates the UK's leading online marketplace, including more than 50 mainly non-bank finance providers.
It blends the facility for business owners to search this marketplace online with individual customer service delivered by a team of SME finance specialists. And the company is among 20 finalists in the Nesta Open Up Challenge to build an online comparison service for small business finance.
Conrad Ford, founder and CEO of Funding Options, argues that the major opportunity of read-only access to account data will be to streamline Funding Options' existing processes, particularly the need to provide scans of bank statements for manual credit underwriting.
"Our record time from first contact with the customer to getting money into their account is about an hour. Everyone from the commercial finance industry thinks that's staggering but if you're a consumer looking for a loan that's really slow," says Conrad.
Most of the hour that transaction required is spent sending and reading scans of bank statements. Sharing data via an API should reduce the entire process to 15 minutes, he believes.
Funding Options will initially offer a fast-track onboarding process that allows customers to share their bank data via an API, rather than sending scans. It also automates the process of checking their data for credit underwriting.
"We're not going to make a big deal about open banking, we're just going to make the benefits of sharing the data clear to them," says Conrad. "We're going to say, 'there's a faster, better way of doing it, or you can do it the hard way'."
He is also planning a current account health-check service to highlight to businesses the strengths and weaknesses that their banking data reveal.
"We know what lenders look for in bank statements so we can say, 'these are the things you're doing right and wrong with your current account, so if you're thinking about getting credit in six months' time, this is what a lender would have liked or worried about – the things you can fix.'
"This is going to help us nurture businesses that approach us and help to get them finance-fit so we can actually commercialise them."
Only 24% of SMEs have a financially qualified person looking after their finances