• Liberis has now advanced over £100 million to small businesses
• High street businesses choose simple and flexible business cash advances
British Business Bank Investments Ltd, the commercial arm of the government-owned British Business Bank, has agreed to provide a facility of up to £5m to Liberis to support finance for small businesses.
Liberis estimates that the investment will support funding to over 2,000 small businesses in 2016 alone. The British Business Bank was set up with the aim of supporting economic growth in the UK by making finance markets for smaller businesses work more effectively.
The facility will enable Liberis, the UK’s first provider of merchant cash advances, to expand. Through their Business Cash Advance product, Liberis provides funding from £4,000 to £300,000 to small businesses based on their future credit and debit card sales. The funding is paid back via a pre-agreed percentage of the business’s credit or debit card transactions, which means it’s especially suited to seasonal businesses as repayments are made in line with income.
Liberis, who pioneered the Business Cash Advance product in the UK, has now financed over £100m. The company expects to double its annual volumes in 2016 to provide nearly £50 million of funding to small businesses. In total, Liberis has now helped over 3,000 businesses invest in and grow their businesses. The average business is advanced £15,000 from Liberis, typically to fund refurbishment, stock purchase or expansion, which is usually paid back over seven to eight months. Liberis is backed by Blenheim Chalcot, one of the UK’s leading Venture Builders with 14 years’ experience of providing technology-based solutions in financial services
Tom Bason, Finance Director at Liberis, said,
“Small businesses are vital to job creation and economic growth yet many still struggle to get loans through traditional providers. Liberis offers a flexible ‘pay as you earn’ option that has proven particularly popular with companies where income fluctuates on a seasonal basis. We want to become the first choice for small business finance by offering a simple and responsible option.”
Peter Wilson, CEO of British Business Bank Investments Ltd, said:
“We are particularly keen to support innovative approaches to providing finance which expand the reach and choice of funding for smaller UK businesses.
“Merchant cash advances can offer a transparent and aligned financing option for business including some which might otherwise be unwilling or unable to raise finance. We welcome Liberis’ responsible approach to developing the sector, reflected in their customer charter, and believe that their growth plans will help our funding reach companies which might otherwise struggle to raise finance.”
Liberis was founded in 2007, to fill a gap in the way small businesses were funded. There was no product specifically designed to help small businesses in the hospitality, beauty, automotive and convenience store sectors.
The business focuses on three core principles: a simple product, responsibly delivered, by specialists who understand our customers. Liberis offers cash advances of between £4,000 and £300,000, to businesses with a ‘card machine’, and monthly card takings of at least £4,000.
Liberis understands small businesses and supports them throughout their growth cycle. Over 60% of the Business Cash Advances granted in 2014 were renewed, as businesses scaled up. Furthermore, the business has a 99% rating on Feefo: testament to the great service that Liberis provides.
Responsible financing is not just a line on Liberis’ Customer Charter but a fundamental principle that lies at the heart of the product and customer offer. A Business Cash Advance has no fixed term and there are no charges if the advance takes longer to pay off than expected. In fact there are no unexpected penalties, fees or charges, ever. Liberis’ in-house experts work with customers to make sure a Business Cash Advance is right for them and that payments are affordable.
Many companies have recognised that a Business Cash Advance provides a sound solution – particularly for businesses where income fluctuates on a seasonal basis. 87% of Liberis’ lending goes to their specialist sectors: hospitality, beauty, automotive and convenience store sectors. Small companies in these sectors are traditionally poorly served by banks, with around 50% of loan applications turned down by traditional lenders according to figures from the Government’s SME finance consultation (December 2014Link opens in a new window).
Liberis hit another major milestone at the end of 2015, when it partnered with Worldpay to offer Worldpay Business Finance exclusively to Worldpay’s 280,000 customers.
Liberis customer case study: Lynette MacArthur, owner of the award winning florist shop Petals of Oban, said “Some days we can put £1,000 through the card machine and on other days it can be £35.00, but the payback mirrors this. There’s no pressure at all. It really is the perfect funding for us.”
British Business Bank Investments LimitedLink opens in a new window is the commercial arm of the British Business Bank. It aims to earn a commercial return by investing through providers of finance to smaller businesses and small mid-caps, pursuing investments on a fully commercial basis without receiving any advantage from the government.
British Business Bank Investments Limited is a wholly owned subsidiary of British Business Bank plc, the UK government’s economic development bank. Neither entity is authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA).
British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc websiteLink opens in a new window.
The Business Finance Guide, jointly published by the British Business Bank and the ICAEW, is a unique guide that sets out the full range of options available for smaller businesses looking to raise finance and offers advice to help companies plan for growth.
For more information please contact:
David Whitehead, Portland
D: +44 020 7554 1838 M: +44 07951 421247
For British Business Bank:
Nick Taylor, Seven Hills
020 7199 6185