THE MODEL: A startup
which offers SMEs access to short term financing with no paperwork. Typically
finance is offered to fund gaps in cash flows and for stock purchases.
STARTUP: Iwoca
(British startup)
WHAT I LIKE
Core Idea – Access
to short term financing for SMEs.
Benefits to Users
– Users can get funds by simply linking their online accounts (such as Paypal,
Amazon etc.) or by uploading bank statements. An offer is given within hours of
doing so. Loans are unsecured and have no documentation or origination fee
attached.
Ease of Use –
Loans are approved and available within hours. Money can be transferred to your
bank account 24*7 and interest is charged pro rata based on the time you take
to repay the loan.
CONCERNS
Competition – The
startup is competing with banks and other established financial institutions.
Building trust will be key.
Asset Performance –
Lending to SMEs without collateral is risky. Bad debts can be an issue of
concern.
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