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MarketFinance is launching a furlough payment delay solution

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UK-based funding solution provider MarketFinance has launched an invoicing finance solution that will help small- and medium-sized businesses (SMBs) pay their furloughed employees' wages, per AltFi.
More than half of SMBs Struggle With Cash Flow
The solution is in response to SMBs' imminent cash flow issue as they face delays in receiving furlough payments through the Coronavirus Job Retention Scheme (CJRS) from the HMRC. MarketFinance's solution enables SMBs that are due furlough payment funding to log the payments as invoices in the fintech's platform and, after passing the necessary checks, borrow the amount they will receive early from MarketFinance's investors.
MarketFinance's checks include grading the invoice risk as it would with its normal invoice financing solutions and confirming that the funds will be used for furloughed employees' wages. SMBs will be charged between 1%-3% interest while the funds are outstanding.
MarketFinance's solution is the latest in a long line of fintech initiatives to assist SMBs during the coronavirus pandemic. Muse launched a similar initiative offering interest-free loans to bridge the gap between SMBs receiving furlough payments through the CJRS and the immediate need to cover employees' wages.
Additionally, ezbob, a Lending-as-a-Service (LaaS) provider, rolled out a smart onboarding solution that enables Coronavirus Business Interruption Loan Scheme (CBILS) lenders to establish which of their applicants are eligible to expedite the loan application and disbursement process. And Countingup rolled out a coronavirus grant calculator for sole traders to help them calculate the grant they'll likely be eligible for through the Self-Employment Income Support Scheme (SEISS).
The invoicing finance solution will likely boost MarketFinance's customer loyalty — we think the firm should also increase the existing furlough financing limit and work with the HMRC to offer the solution to small businesses in conjunction with the CJRS to increase brand recognition.
  • MarketFinance's solution could provide a vital lifeline to SMBs fretting over imminent payday wages, increasing customer loyalty. Most businesses are due to pay their staff wages this Friday, yet they won't receive the HMRC funds until Monday at the earliest. This creates the risk of SMB employees either not receiving their wages, or the payments being delayed. SMBs will be hard pressed to pay furlough payments upfront, and alleviating their financial difficulties in their time of need could boost loyalty and trust toward MarketFinance, while potentially making users more likely to return to use its services after the crisis. What's more, the initiative may attract new customers to its platform, as a huge number of SMBs will be in desperate need of immediate funding to pay staff wages.
  • We think MarketFinance should expand the furlough financing limit and offer its solution to the HMRC to catapult its solutions onto the national stage. The fintech's solution may de facto work in conjunction with the CJRS — but we think it should go further and seek to expand the furlough financing from the current £150,000 ($185,380) limit and offer its solution to the HMRC in an official capacity to small businesses. This would put its capabilities onto a national stage, boosting its brand recognition, while also demonstrating the power of its digitally enabled solutions to the government, making it more likely that the government will turn to it for future schemes.
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https://www.businessinsider.com/marketfinance-rolls-out-furlough-payment-delay-solution-2020-4?IR=T

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