We meet Jack Trowbridge, whose eye-catching dancing at a wedding led to him co-founding GapCap, an invoice finance startup based at The Record Hall.

“Let’s say you’re a coffee bean supplier who’s finally won a contract with Tesco,” explains GapCap’s partnership lead, Jack Trowbridge, over, appropriately, a coffee at The Record Hall. “Tesco wants £100k of your coffee beans but won’t pay you for 60 days. The upfront costs of supplying those beans while paying for your overheads make it very difficult for small businesses.” Jack’s promised there’ll be no maths, but I’m just about keeping up.

That’s where GapCap comes in: it’s a fintech (financial technology) platform that allows businesses to leverage their future cashflow by borrowing against outstanding invoices. The cash-poor business simply fills out a form online, sends it to GapCap and typically gets a response from within an hour. If the answer’s yes, GapCap will then lend them up to 85% of the value of the invoice straight away, setting a monthly interest rate of between 2 and 3%. “We can fund an invoice within 24 hours, whereas a bank would take 24 days,” sums up Jack. 

Jack Trowbridge and Alex Fenton, Co-Founders of GapCap

GapCap recently celebrated its third birthday, having started trading in October 2014. The company was the brainchild of Alex Fenton, who while working in private equity had noticed that a lot of the problems encountered by small businesses boiled down to the simple matter of cashflow.

Seeing an opportunity to solve the problem, Fenton set up GapCap with three university graduates, including Jack Trowbridge, who he met at a wedding. “I think it was my bad dance moves that made him think I could make a fool of myself in any room and get away with it,” says Jack, self-deprecatingly.

The four started out in a shoebox office in Vauxhall with some renovated laptops and a whiteboard. Within two months they had their first client; within three, they had financed their first £100k invoice. The company grew very quickly, and in May 2015 it signed a multi-million pound debt finance line from a family office, allowing it to fund multiple businesses. GapCap now employs 19 full-time staff and has over 100 clients, most of them SMEs (small and medium enterprises).

Gapcap first joined Workspace in 2016, moving into Quality Court near Chancery Lane. “There was an iPad you could order coffee with,” recalls Jack. “I was sold.” The following year, in April 2017, GapCap moved into The Record Hall, becoming one of the first companies to move into Workspace’s newest state-of-the-art building.

Having complementary businesses in the same building is a definite plus. “You can look at the directory at think ‘I need a PR guy’ and go and knock on their door,” says Jack.

Otherwise the cafe area and regular events make it easy to meet the neighbours, which Jack finds refreshing, having been to too many “networking events where people shuffle around with name badges”.

The Record Hall in Hatton Garden

GapCap has also benefited from the wider Workspace ecosystem, having met Chris Dines from Informed Funding, another Workspace customer that connects businesses to finance. “He’s introduced me to plenty of businesses that we’ve helped along the way,” says Jack.

Invoice financing has been around for many years, but this type — no contract tie-ins, quick, easy, digital — is only about five years old. GapCap was one of the first players in what is now a competitive marketplace. So, what distinguishes GapCap from its competitors?

“‘We sit in the peer to peer market, but we are a balance sheet lender deploying capital through institutional investment.’” says Jack. Other players in the alternative finance world allow uneducated investors to put their money in without understanding the risks involved. Not GapCap, who raise institutional investment from educated investors and family offices.

Otherwise, GapCap guarantees a fixed interest rate from day one, whereas their competitors effectively auction off invoices to the crowd. And according to Jack, a lot of fintech firms are using chatbots these days, whereas GapCap is “fintech led by people”, according to Jack: something which he put their high client retention down to.

What does the future hold? Alternative finance businesses are currently limited in what they offer — for example, GapCap does selective invoice financing while Crowdcube does crowdfunding equity. But Jack foresees alternative finance businesses becoming one-stop-shops for many financial services in the not-too-distant future. “It would be great if GapCap could offer the same things that a bank could — invoice finance, a short-term loan, term debt, an overdraft.” Barclays, you’ve been warned.

Business finance is something we know a little bit about, just check out our Community section to discover more. Would you like to join companies like GapCap in a Workspace building? Come and see what we’ve got on offer, we can’t wait to meet you!