Capitalise has been named a finalist in the Open Up Challenge, this time with their latest product development: Capitalise Protect. The Open Up Challenge is a £2.5m prize fund, backing ambitious products that will help UK small businesses save time and money, reduce stress and discover the intelligence in their financial data through Open Banking.
Capitalise Protect helps SMEs plan against the expensive, unplanned short-term cash flow need which may damage their growth prospects or stability. “Our product is first-to-market in how we combine protection and funding to solve the SMEs short term cash flow needs. Similar to what is seen in other markets, from Revolut to Ant Financial in China, the combination of InsurTech and Fintech through a single point of access is a powerful proposition in the market.” says Ollie Maitland, Co-Founder.
Capitalise Protect is to be distributed through their network of over 1,000 accountants who are financially trained and seen as trusted advisers by their SME clients. At a time when accountants core services of bookkeeping and compliance is under threat by AI and cloud computing, Capitalise.com provides a new service-line for these firms to start to grow their revenue once again.
SMEs behaviours work against them, 60% don't produce regular accounts (BDRC monitor), 78% hold less than £10K in cash and with one in three of all debtor payments being late, it’s no surprise their search for funding is last minute. The result is 1 million overdrafts and 900,000 credit-cards used by UK SMEs (FSB Report - Late Payments 2016). Adoption of Open Banking is similarly affected by these behaviours and accountants, in their advisory position, are well placed to introduce the benefits of Open Banking to their community. The CMA, who initiated the challenge to drive competition in the UK banking market, are supportive of working with “finance professionals” in their final report.
“When we look at our UK SME banking systems with fresh eyes and the possibilities that Open Banking affords us, we can see that there is a systemic failure - which we accept purely because these practices have been the norm for so long. The current banking system forces businesses into short term cash flow funding solutions. Whilst we see this as effective in treating the symptom of late payment, it does not resolve, nor even begin the process to resolve, the underlying issue behind late payments. If implemented correctly, the concepts driving Capitalise Protect, will soften the knock on effect on SMEs suffering from the growing number of corporate insolvencies, CVAs and ultimate defaults in the market, such as Carillion, House of Fraser and Toys R Us.”, Paul Surtees, Co-Founder and CEO.
The impact of 86% of late payments being due to either insufficient customer funds or a dispute, amounts to £40bio locked in disputes in 1-49 employee SMEs. Compared to the total SME funding facilities of £108bio in Q3 2017 (UK Finance), the impact of late payments is a significant issue holding back UK SME growth.
Over the coming months, Capitalise is investing the challenge grant and additional capital directly into the development of the product. The product team has grown by three fold in the last 12 months. “Business builders, as a community, make bets on the future and compete to towards their future ambitions. All too often, ambition is limited by access to finance or can be tripped up by disputes with customers.”
Capitalise.com provides technology and training to our Capitaliser advisers employing “Adviser-led Capital” through Capitalise Grow and Protect to help fund and protect the balance sheets of UK SMEs.”
Since Capitalise started in 2015 and the launch of Capitalise Grow in 2016, the London VC backed Fintech, has focussed on bringing transparency to the UK lending market by empowering SME advisers to find, select and apply for finance on behalf of their clients. Capitalise has been recognised for its innovation, winning the 2017 Nesta Challenge with Capitalise Monitor, aimed at monitoring the health of SMEs and encouraging forward planning in the Grow product.
Capitalise.com, with its all encompassing Grow, Monitor and Protect products, is the only platform, globally or in the market, which provides advisers, specifically accountants, with a comprehensive solution to tackle the pain points that SME face in the context of funding. “Capitalisers” can use financial data from Open Banking and bookkeeping data from accounting giants QuickBooks and Sage, which means accountants are armed with the knowledge and insight to give up to date advice truly reflective of the dynamic UK lending market. Accountants across the UK recently voted in Capitalise as a finalist in the Accountancy Web Cloud App of the Year for 2018.
The recognition granted by Nesta comes at a timely point as our customer base has just grown to over 1,000 firms across the UK, including 60 of the top 100 UK accounting firms deploying the Capitalise platform.