Santander UK has partnered with online lender Kabbage to provide small businesses with financing within hours.
The bank has partnered with the US fintech firm, in which Santander invests, to speed up the underwriting process so businesses can potentially access working capital of up to £ 100,000 online on the same day.
The launch of the service over the next two months is the first time that a major UK bank has offered small businesses quick access to finance, which typically takes two to 12 weeks.
The move comes amid increasing competition from peer-to-peer lenders as small and medium-sized businesses look for ways to get a loan quickly. The bank will launch the service on Monday at the Money 2020 conference in Copenhagen.
Santander has partnered with Fundraising circle in 2014 as a way to refer small business borrowers, who may not match the bank’s lending appetite, to the start-up.
Nathan Bostock, Managing Director of Santander UK, said: “With SMEs making up 99% of the UK private sector, fast and secure access to funds would allow them to continue to make a significant contribution to the UK economy.
“Our collaboration with Kabbage aims to provide UK businesses with the ability to withdraw funds when needed, whether to cover a short-term financing need or to enable them to seize growth opportunities as they arise. ‘they introduce themselves. “
Kabbage accelerates loan decisions using the risk rating determined by Santander, with the financial technology company’s own information and external data sources, including social media.
The platform leverages Kabbage’s processes to accelerate automated lending, allowing customers to withdraw credit as often as once a day.
Small business credit is an area in which Santander wants to develop. The bank was forced to pull out of a deal in 2012 to buy Williams & Glyn, with the business-focused lender separated from the Royal Bank of Scotland, largely due to technological issues.
Atlanta-based Kabbage, which launched in 2011, raised $ 135 million in October from Santander through its InnoVentures fund, ING and Scotiabank, paving the way for product collaboration. InnoVentures, a $ 100 million fund, invests in emerging fintech companies.
The bank’s Spanish parent company also announced a few weeks ago the creation of a digital-focused advisory board, appointing Lawrence Summers, former US Treasury secretary, as chairman.
Ana Botín, President of Santander, said: “The true power of technology to transform lives emerges when it is adopted and distributed by companies like ours. How we internalize and adapt to new technologies in the years to come will determine our success. “
Kathryn Petralia, chief operating officer at Kabbage, said Santander’s decision underscores its “desire to quickly present a technology and data-driven solution to its customers.”