Funding Xchange urges lenders to adapt to support the recovery
Lenders need to adapt to support the economic recovery, Funding Xchange has said.
The business funding aggregator said that the Covid-19 crisis has accelerated the transition to digitisation. It put much of this down to so-called ‘Avengers’ – businesses that have re-invented and pivoted their business models to respond to rapidly changing conditions and customer needs.
Read more: Funding Xchange launches platform to aid digital lending
However, Funding Xchange said that these firms have been largely unable to access government funding, which had instead focused on the weakest businesses in order to stem unemployment and insolvencies.
“As the broader economy awakens and support schemes are scaled back, the continued recovery will require these businesses that have shown their agility and performed well to access the funding they need,” said Funding Xchange.
“However, the expected K-shaped recovery – with some businesses recovering quickly while others continuing to lose cash as costs bounce back but revenues remain subdued – means that many lenders are pausing to determine whether and where to deploy fresh funding.”
Funding Xchange’s third-quarter lending monitor found that 60 of businesses now report a positive or neutral trading performance, which is in line with the gradual reopening of the economy.
This was an improvement from the results of the first-quarter lending monitor which showed an almost equal split between UK businesses emerging from the pandemic that have weathered the storm and those that were bruised.
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“Seeking out opportunities in an uncertain time requires greater insights into businesses’ trading and payments performance,” said Katrin Herrling (pictured), co-founder and chief executive of Funding Xchange.
“It is clear that there are attractive lending opportunities in the market and unlocking these will require digital capabilities to be able to identify and deploy funding efficiently.
“The use of real-time data to understand how businesses are performing is becoming even more important in these times. This is where FXE Technologies comes in, delivering digital capabilities to the small- and medium-sized enterprise (SME) lending ecosystem.”
