British finance firm MarketInvoice wins bank funds

LONDON, March 26 (Reuters) - Two European banks will lend 135 million pounds ($191 million) to UK businesses through intermediary finance firm MarketInvoice, the British company said on Monday.

Portuguese online bank Banco BNI Europa and German investment bank Varengold Bank AG will lend 90 million pounds and 45 million pounds respectively, adding to a three-fold increase in the finance available from institutional investors through MarketInvoice’s online platform since 2014.

MarketInvoice lends investors’ money to UK businesses, with unpaid invoices often acting as collateral. It said the growth in funding from institutional investors will help it participate in larger finance deals.

“The volume and value of invoices we’re funding is higher than ever before,” said Anil Stocker, CEO and co-founder of MarketInvoice.

“Our growing institutional investor base on the platform has enabled us to support a broader pool of businesses.”

Institutional investors, including banks and pension funds, are increasingly warming to alternative finance providers like MarketInvoice, as well as peer-to-peer platforms like Funding Circle or Zopa, which sprung up as banks retreated from small business lending following the financial crisis.

While seen as riskier than traditional forms of lending, the sector can offer comparatively high returns in an era of low interest rates.

Institutional investors accounted for 34 percent of peer-to-peer property lending, 28 percent of peer-to-peer business lending and 32 percent of peer-to-peer consumer lending in 2017, according to research published last December.

Lukas Diehl, executive vice president of marketplace banking at Varengold Bank, said increasing the lender’s investment was a “straightforward decision”.

“The MarketInvoice model has proven itself to be a dynamic marketplace servicing a vast swathe of businesses,” he said.

MarketInvoice, whose other institutional investors include the British Business Bank and local governments, has lent more than 2 billion pounds to UK companies since its launch in 2011. ($1 = 0.7068 pounds) (Reporting by Emma Rumney; Editing by Elaine Hardcastle)