Santander to provide same-day funding to UK SMEs

British bank Santander UK is trialling a new web-based tool that intends to speed up the money lending process from weeks to hours for UK SMEs. How can businesses expect to benefit from this planned funding transformation?

An online lending service

At this year’s Money 20/20 Europe conference, Santander UK announced its new online business lending service that will cut the traditional approval period of two to 12 weeks down to between 20 minutes and 13 hours. The solution will allow UK SMEs to apply for same-day funding of up to £100,000, with the bank applying 8-20% interest depending on the business.

Santander UK's CEO, Nathan Bostock, emphasised the value of the service by outlining how SMEs account for “99 per cent of the UK private sector”. Mr Bostock added that businesses will be to able request loans whether they need them for “covering a short-term funding need” or to “seize growth opportunities as they arise.”

Santander working with Kabbage 

To create the 24/7 service, the UK bank has teamed up with US fintech provider Kabbage, which is already partially owned by the Santander Group. Kabbage has approved 95% of the business loans requested by customers during its use in the US. Moving forward, both parties will now target a UK market of 5.4 million SMEs.

The automated online service requires no manual checks and works by comparing Santander’s risk-scoring against Kabbage’s data. In addition to performing fraud checks and processing algorithms, Kabbage also checks the applicants bank accounts, credit ratings, payments providers and even social media interactions before reaching a decision. In some cases, slow social responses and general inactivity will count against businesses.

At present, a pilot is underway to test the solution before making refinements ahead of a full release. Existing Santander customers are currently participating in the two-month trial, but the wider UK SME community will have to wait, as neither party has set a release date. Meanwhile, small businesses can improve their short-term cash flow by working with ethical Enforcement Agents like Dukes Bailiffs to recover outstanding invoices in a timely manner.