CRIF and Penny launch a bill financing service based on Open Banking

Europe-based credit information provider CRIF partnered with a bill financing provider Penny to enable more UK small businesses to get their bills paid instantly.

More UK small and medium-sized businesses (SMEs) will be able to get their bills paid instantly, better manage their cash flow and improve their overall creditworthiness. The innovation was made possible through a new partnership, combining instant payment services from bill financing provider Penny with CRIF’s credit scoring solution. This collaboration brings CRIF’s expertise as an Open Banking solutions provider to the world of invoice financing.

There are 5.5 million SMEs in the UK, representing over 99% of all businesses. Together they employ 16.3 million people with an estimated turnover of £2.3 trillion. The partnership between CRIF and Penny comes as more businesses across the country are facing challenges due to the uncertain economic climate:

  • Nearly one in three businesses say they have experienced an increase in late bill payments in the last three months of 2021;

  • Nearly one in 10 said late payments now threaten the viability of their business.

Penny’s invoice financing solution works by allowing a business to advance money against the amount owed by its invoice customers. The billed customer then pays Penny directly with terms typically longer than 30, 60, or 90 days. However, if an accurate picture of a small business’s financial situation is not available, it may lead to rejection.

The new service uses CRIF’s Credit Passport, which uses data from Open Banking to provide a secure, real-time way to speed up the decision-making process for lenders and offer transparency and guidance to SMEs on their solvency.

Penny customers will be able to connect their business bank accounts, enabling smooth instant credit scoring through Open Banking. This approach gives a more complete and accurate picture of a company’s finances than traditional types of credit score and reduces fraudulent claims by establishing a historical relationship with the subject of the invoice. With data updated daily, businesses that may have previously been rejected due to lack of credit information can now get their bills paid instantly, with the decision-making process reduced to less than 30 seconds and funds released within 24 hours. The use of Open Banking in invoice financing thus provides a clearer and more accurate picture of a company’s creditworthiness and enables more informed and lower-risk lending decisions to be made. This innovation is expected to allow more business applicants to be accepted for loans through Penny.

The announcement builds on previous work between CRIF and Penny to offer invoice financing to Credit Passport’s 30,000 registered SMB customers, by enabling SMBs to access instant invoice financing directly through Penny’s services. This new partnership service will be available to customers in June 2022.

Rosalie M. Dehner