Liberis raises £57.5M to offer finance for small businesses paid back via customer card transactions

Apr 11, 2018 · techcrunch.com

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Liberis, the London-based fintech that provides finance for small businesses, has raised £57.5 million in new funding to help support the company’s growth. The alternative finance provider makes loans against a company’s future credit and debit card sales.

The majority of the new capital being raised by Liberis is debt, which in turn will enable it to issue more loans. The facility is being provided by British Business Investments (the commercial arm of the tax payer-funded British Business Bank), Paragon Bank, and BCI Ltd.

In addition, Blenheim Chalcot has made an equity investment into Liberis. The so-called "digital venture builder" also previously backed Clearscore, the credit scoring startup recently acquired by Experian.

Providing a new financing option as a replacement for a traditional bank loan or extended overdraft — which is increasingly hard for small businesses to come by — Liberis provides funding from £1,000 to £500,000 based on a company’s projected credit and debit card sales. However, the clever part is that the loan is paid back via a pre-agreed percentage of the business’ digital transactions, making it especially attractive to seasonal businesses that have very uneven sales throughout different times of the year. There isn’t a time limit placed on when a loan has to be repaid, either. Instead, the repayment schedule is directly tied to the size and pace of a small business’ card transactions.

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