SME finance platform, Alternative Business Funding (ABF) has announced a £6m fundraise, as it aims to rapidly expand – increasing company registrations to over 160,000 and helping these businesses find over £500mn of finance in just five years.
ABF, which has designated status as approved by HM Treasury on the recommendation of the British Business Bank for the government-led Bank Referral Scheme, has been widely regarded as a fintech trailblazer, after it was launched in 2014 as the UK’s first collaborative SME funding platform, backed by then Secretary of State for Business, Vince Cable.
The company has appointed boutique advisory firm Lazarus Consulting to canvass interest with a view to identifying a new investment partner by the end of the year to extend ABF into a wider marketplace and to build out the recurring revenue opportunity.
The investment will be specifically used to accelerate the development of ABF’s innovative financial technology, which will allow the platform to provide both predictive lending powered by Artificial Intelligence (AI) to customers, and fully capitalise on the Open banking opportunity. The funds will also be invested into marketing – to increase market penetration through digital channels, direct marketing, TV, and site partnering. ABF is also eying up the future potential of international expansion to access the global business funding market.
ABF has been commercially operating since 2016 giving UK businesses access to a variety of funding choices, which can be approved in some cases within hours. To date, the ABF platform has over 25,000 registered small businesses and £40m funded.
With almost half (43%) of the 5.7m businesses in the UK using external finance, often multiple times a year, there is huge market growth potential for the funding platform. ABF expects to increase the number of registrations on the platform to over 160,000 small businesses in the next five years, with the aim of securing for them over £500m in funding.
ABF chairman, Adam Tavener, one of the original forces behind the Bank Referral Scheme, working with HM Treasury to deliver the scheme, said:
“ABF is at a very exciting time, and with the ‘go compare’ culture rapidly growing in popularity – we see that it is only a matter of time before, as with other financial products, those businesses seeking commercial finance will go online to compare the funding solutions open to them, before even visiting their bank.
With our strong brand and scalable technology, we also see a real opportunity to move into other business services such as equity finance, personal lending, business banking, and credit cards.”
ABF also partners with like-minded organisations to deploy a white-labelled funding solution directly to their customers or members through ABF’s innovative Funder Finder Engine. Key organisations partnered with to date include Marsh Commercial (Jelf), Business West and TorFX, the award winning provider of international currency transfer services.
ABF’s innovative technology allows it to provide small businesses with the only fully automated choice in the market to research directly and find finance for their business. ABF uses straightforward information to match SMEs with a wide range of funders based on the business requirements and against the suitability of the funding product. Presently it provides small businesses with 140 funding products from over 100 funders, including some of the major banks.