Nimbla and Wiserfunding partner to protect UK SMEs from insolvency

  • Covid-19 , Credit Risk , Insurance
  • 28.05.2020 06:01 am

With the number of UK SMEs in significant financial distress reaching over 500,000 due to COVID-19[1], leading invoice insurance provider Nimbla has teamed up with SME credit risk assessment platform, Wiserfunding, to improve the availability and pricing of commercial credit insurance. This will ensure that SMEs can continue trading and prevent the UK economy from stalling.

The partnership has been announced following research from the British Chamber of Commerce showing that the majority of SMEs have just three months or fewer of cash reserves to keep them afloat[2] and the UK government launching financial schemes to help UK SMEs, who employ close to 16 million people in the UK and make up 60% of the private sector workforce[3].

Nimbla protects SMEs against insolvent customers with trade credit insurance on a per-invoice basis. Unlike traditional trade credit insurance models, Nimbla invoice insurance allows businesses to review the risk rating of each invoice and insure them individually. If a customer becomes insolvent and an invoice goes unpaid, Nimbla will quickly replace the money that has been lost.

Wiserfunding, the latest venture from the founder of the Z-Score credit risk model, Edward Altman, enables to better assess the credit profile of SMEs by analysing more comprehensive data. Building on the Z-Score model, the industry standard for over 50 years, Wiserfunding uses artificial intelligence to assess intangible factors such as corporate governance, management capacity and macroeconomic outlook.

By integrating Wiserfunding, Nimbla is able to more accurately assess and appropriately price the risk of insuring invoices. This supports its goal of safeguarding SMEs against insolvent customers, particularly relevant during economically challenging times such as the COVID-19 pandemic where SMEs will be reliant on cash flow to maintain liquidity. By decreasing the amount of SME that could become insolvent, the partnership aims to reduce the magnitude and length of the impending recession.

Flemming Bengtsen, CEO & Founder of Nimbla, comments: “SMEs can become vulnerable overnight if their customers become insolvent, and this risk is exacerbated by the challenging economic conditions that COVID-19 has created. We are integrating Wiserfunding into our platform to improve our risk management and enable quicker and more accurate insurance decisions, reducing the risk of defaults. Fundamentally, this will allow SMEs to trade with security and confidence.”

Gabriele Sabato, Co-founder and CEO of Wiserfunding, adds: “With 500,000 SMEs already in significant financial distress, we need to move quickly to protect the backbone of the British economy and ensure the right companies are protected from harm. Commercial credit insurance is the key to accelerating economic recovery, but trade credit is facing significant challenges and may disappear entirely during this difficult economic period – increasing the magnitude and length of the recession we are about to enter. Nimbla’s mission aligns with Wiserfunding’s in ensuring that credit and insurance are delivered to the right SMEs at the right price. By combining the best innovations from the fintech, insurance and risk management worlds, we will be better positioned to support UK SMEs and mitigate the impact of the recession.”

Wiserfunding and Nimbla are both members of a fintech taskforce responding to the chronic need for credit by British SMEs facing cashflow problems during the COVID-19 crisis[4]. Together they are providing a turn-key origination and underwriting platform that allows banks, alternative lenders and private debt lenders to virtually and digitally deploy funds to businesses during the Covid-19 outbreak. Other taskforce members include Trade Ledger, a digital lending platform and NorthRow, a remote client onboarding platform. 

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