How Flexible Financing Can Drive Growth for European SMEs

SMEs are the lifeblood of the European economy. According to advisory group, Interreg Europe, they represent 99% of all businesses and two-thirds of all private sector jobs in the EU, while according to the European Investment Fund’s SME Access to Finance Index: “together, SMEs produce more than half of value added in the EU.”

That is why the success of SMEs is so crucial to the overall health of the European business landscape. Yet, far too often lack of easy access to finance threatens their prospects. Starved of the flexible funding they require, many small businesses struggle to survive, while others find growth opportunities severely restricted.

At Capital on Tap, we have seen at first hand the challenges UK SMEs face. There is often a sense that retail banks don’t speak their language or prioritise their needs. These banks certainly struggle to come up with finance offers that really work for SMEs, mainly because it is hard for them to make the economics work for a small loan.

“We continue to see small businesses being underserved by retail banks and we are trying to solve that issue not only in the UK but now also across the rest of Europe.”

That’s where we believe we can step into the breach. Our automated technology platform can run with minimal costs, meaning that we are able to provide start-up enterprises with loans of as little as £25,000 – and, critically too, we put SMEs front and centre of our whole approach.

The online application process is straightforward, with 97% of customers getting an instant credit decision. SME customers pay no interest on card purchases if they pay off their balance in full every month. Otherwise, they only pay interest on the funds they use. As well as having no monthly or annual fees, they also benefit from having no ATM charges or foreign transaction (FX) fees to worry about.

Since launch, we have provided £500 million worth of funding to 40,000 businesses across the UK. That’s why, while continuing to focus on the UK, we are now looking to also branch out into the wider European marketplace.

“Businesses have loved that our platform was simple and easy, and demand has matched what we have seen so far in the UK.”

It’s clear that SMEs across Europe face many of the same concerns that they do in the UK but generally there are even fewer funding options for smaller businesses in other European countries than there are in the UK.

We have tested our platform in five different European countries already – and have had an incredible response in each. Businesses have loved that our platform was simple and easy, and demand has matched what we have seen so far in the UK. It’s a positive sign.

We continue to see small businesses being underserved by retail banks and we are trying to solve that issue not only in the UK but now also across the rest of Europe. Flexible funding really can provide the answer here. Simply: businesses can go from having no options to having a fantastic option for growth.

– David Luck, CEO, Capital on Tap

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