Caroline Langron is Managing Director of Platform Black, an online business finance marketplace.
UK SMEs can take advantage of two main products to access working capital, including instant funding via single invoice trading and supply chain finance, which ensures faster payment to suppliers. Since its launch in 2012, the business has grown rapidly providing over £117 million of funding through the platform.
She tells us about Platform Black, the trends she forecasts in alternative finance and what exactly she'd say to George Osbourne if she were stuck in a lift with him.
Tell us about yourself and why you decided to join Platform Black.
I have a long history in the asset-based lending industry, having worked in the space at a senior level for the best part of 35 years. Having worked for Barclays, Close Bros. and Bibby Financial Services to name a few, my experience spans not only the UK, but across Europe and America. During my time as a board director at Bibby, I was responsible for establishing their Invoice Discounting business and building their risk protocols which over a ten-year period delivered the group’s most successful business, recording a £2.5m PBT and negligible defaults.
My whole career has been focused on the SME sector and I am passionate about ensuring they have access to the level of working capital they need to grow. I made the move to managing director at Platform Black 18 months ago because it supports this. Platform Black is an online business finance marketplace which brings funders and businesses together to ensure that businesses gain access to funding, quickly, simply and on their terms, giving them greater control.
Platform Black have been in the industry for over four years. How have the company and industry changed?
The Fintech industry has grown rapidly and continues to do so. As more players have entered the space investing in technology to deliver funding solutions to businesses, the supply of and access to working capital finance has become much easier. However, with any rapidly emerging industry, there is a need to ensure that all parties involved understand how it works, ensuring a safe and responsible funding option for all.
We undertake robust due diligence on the businesses seeking funding through our platform.
Over the last four years, Platform Black has evolved as a business too. We continuously invest in our online platform to ensure that we are providing the best possible experience for both our funders and businesses looking to access finance quickly and simply. In addition to this, over the last two years we’ve been strengthening the management team and skill set within the business, which means we undertake robust due diligence on the businesses seeking funding through our platform and it is this information which gives our funders greater assurance that they are making good funding decisions.
What’s the typical profile of a successful business which seeks finance from you?
We provide access to working capital for SMEs and small corporates. These businesses are trading successfully and need to release funds from unpaid invoices to grow their business, or they are often looking for supply chain finance options to help ensure they can pay suppliers up front to protect their supply chain.
Businesses who use Platform Black are varied and from a diverse range of industry sectors including manufacturing, construction, the public sector and service-based businesses. They have been trading for a minimum of two years, turning over in excess of £500,000 per annum and have been profitable for a minimum of six months.
What information should a business have prepared before auctioning an invoice on your platform?
A business needs to register on the platform by visiting www.platformblack.com. It’s a very simple process, requiring only basic company information such as company name, registered office address, turnover, details of the company directors and a copy of management accounts if available.
My best advice for businesses looking to access working capital is to be clear on what they want.
Once registered you can upload an invoice straight away. The invoice needs to confirm who the debtor is, the value of the invoice, a description of services provided and any supporting documentation. They should also know how much funding they want to access from the invoice, for how long e.g. 30, 60 or 90 days, what they are prepared to pay for funding and how long they want the auction to last for. Then our funders start to commit funding, based on this criteria. It’s that simple.
What’s your advice for a small business seeking funding?
My best advice for businesses looking to access working capital is to be clear on what they want. Then, investigate all of the options out there in the market. Businesses no longer have to buy inflexible, slow and expensive forms of finance. There are many more innovative forms of funding that are fast and easy to use; more flexible - geared to your needs; more transparent - giving you greater control and lengthy contracts should be a thing of the past. Finally, make sure you are clear on the fees upfront. These forms of finance can be used on their own or as a complementary funding solution alongside any existing finance arrangements you have in place.
At Platform Black, we work hard to do deliver all this. SMEs can have facilities from £10,000 to £15 million and can dip in and out when required. There are no lengthy contracts or set up fees. A typical transaction fee including the funding cost is 1 to 3% depending on the credit risk.
What measures could the government introduce to make life easier for new and growing companies?
They need to ensure that SMEs have access to sufficient levels of working capital finance to ensure business growth. The introduction of the British Business Bank (BBB) was a step in the right direction, but the mandated referral scheme which is designed to ensure that businesses who cannot be supported by traditional funders are referred to a wider breadth of funders seems to be languishing in debate and process. This needs to be made a priority so that those businesses who cannot access funding do not give up and as a result cause their businesses to stall.
There will be an increasing focus on ensuring funders, businesses and consumers are protected.
If you were stuck in a room with George Osborne, what would you tell him?
SMEs are the lifeblood of our economy and the government needs to do more to support new and existing companies in their pursuit of business growth. 2016 will be a challenging year for our economy as a result of many global challenges. It’s critical that the government does everything it can to support and drive SME growth as they will help drive growth in the British economy, create jobs and promote future wealth.
What do you see as the most important trends in peer-to-peer lending?
As the move towards technology enabled peer-to-peer lending continues and volumes grow, there will be an increasing focus on ensuring funders, businesses and consumers are protected. This may result in a call for regulation of the space but regardless of the outcome of this, the industry needs to ensure they lead on this now.
At Platform Black, we place a huge focus on the importance of ensuring safe and responsible funding. Over recent years, we have been working really hard to ensure complete transparency, so our business customers understand how much funding they can access, the fees involved and how long they can have funding for. It’s also why we have spent the last two years strengthening our management team and skills to deliver robust credit information to funders so that they can make informed decisions, enabling them to lend money safely to our business customers.
Find out more about Platform Black