• Rob Straathof, CEO at Liberis


• 13.06.2022 12:09 pm

1. Tell us about Liberis.

Liberis builds flexible embedded finance solutions that empower businesses and provide a positive impact. Founded in 2007, Liberis is a leading global embedded finance platform with a mission to provide small businesses with accessible and responsible finance, based on the belief that funding should always be a positive force for small businesses.

Our platform embeds within partner ecosystems and utilises their wealth of data through a simple API to offer SMEs hyper-personalised and pre-approved revenue-based finance, from as little as £1,000 up to £1,000,000. This global platform enables a frictionless ‘2 click’ embedded finance solution for small businesses through existing ecosystems such as banks, marketplaces, software providers (ISVs) and acquirers. Payments are linked to a business’ daily revenues, enabling automatic payments in line with their daily income.  

With over 14 global strategic partners and direct reach to more than 1 million small businesses, Liberis has provided nearly $1bn of funding in over 45,000 transactions, enabling over 100,000 jobs to be created and saved. Liberis’ revenue-based finance is a form of receivables finance, not a loan. Amounts advanced are subject to status and our underwriting process before any offer can be made.

2. Who are your clients and partners?

We work with small and medium-sized businesses from various sectors through partnerships with banks, marketplaces, software providers (ISVs) and acquirers. There are over 300m SMEs operating across the globe who employ over 930 million people, contributing more than 60% of global GDP. They are a critical driving force in the global economy, creating jobs, driving innovation, and generating income domestically and through trade.

3. Do small businesses have specific needs in terms of lending? And if so, how is fintech supplying those needs?

With a funding gap of circa $5tn and too much uncertainty due to the traditional high street bank’s lack of appetite to provide small businesses with funding, they are seeking alternative methods of getting the vital funding they need to help them grow. Without the finance they need, small businesses can’t thrive –and neither can our economy. We want to fix that.

By using data smartly and having insights upfront, we can pre-approve many small businesses for funding as they require it, enabling opportunities for them. That means they can get instant access to these facilities with the click of a few buttons as opposed to long application forms, uncertain underwriting timeframes and delayed access to funds.

Our data shows that businesses that receive funding grow up to 50% faster than the competition and have a 20% higher chance of survival over three years. Fintechs Like Liberis is at the forefront of helping with this!

4. Discuss the three SME lending trends that are disrupting the space

Revenue-based finance is a natural way to fund small businesses due to seasonality and to avoid lumpy monthly payments. It is also an excellent way for businesses to manage their cash flow more efficiently as payments are based on their daily credit and debit card receipts. Revenue-based finance has been around since the 1800s and has found a new lease of life with eCommerce businesses. It allows companies to do things like fund additional marketing activity and purchase more stock at a higher ROI than other types of funding, all at a small fee, leading to more substantial growth potential. SaaS businesses also benefit significantly from revenue-based finance as they can gain access to 12 months of committed monthly payments for a fee upfront.

The ethos of embedded finance is to offer funding based on business transaction volumes, contracts, inventory, or marketing at the point of sale or interaction instead of applying separately. Reducing the hassle of filling out overly complex application forms and going through long approval processes that a business would usually endure when applying for finance with a frictionless “2-click” application process leads to much higher conversion rates and customer loyalty.

Based on the data that partners can access, embedded finance platforms can offer ‘2-click’ pre-approved funding options to small businesses that require and deserve it. This is important for small businesses that may struggle to get finance from their primary bank partner. It eliminates things like fear of rejection and arduous application processes and puts their minds at ease, knowing they are getting funded through a brand they already know and trust.

5. What does the future of small business lending look like to you?

There will be more reliance on flexibility than ever before. Pre-approved credit using historical company data smartly at the point of transaction will become much more popular. Small businesses will never need to go through a lengthy application and underwriting processes.

Banks will continue to hold the relationship with small businesses, but they will have to integrate with the ‘best of breed’ fintech platforms to provide the products that will best serve their customers.

Commercial BNPL and digitisation of B2B payments could eventually see the extinction of paper invoices and more archaic offline payment methods like cheques. It’s just a matter of when!