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Accelerated Payments, the invoice financing provider, with bases in London, Dublin and Toronto anticipate a rocky period as companies emerge from the COVID-19 pandemic and come to terms with the post-Brexit environment. Despite this, they expect businesses with access to finance to overcome the challenges to make the most of new opportunities.

“Unprecedented levels of cash have been pumped into SMEs during the pandemic and I think problems are going to occur in the next 6-12 months as the government withdraws,” Ian Duffy, CEO of Accelerated Payments explains. However, businesses will then be hit by the Brexit. “The market never likes barriers, and the reality of Brexit is that it creates barriers,” but Duffy already sees businesses adapting to this, as well as the role Accelerated Payments can play. “A lot of SMEs in the UK are now seeking to export to other markets, and we can support them to be able to finance those transactions.”

The level of government support during the pandemic has also cushioned businesses from the impact of recession, providing a buffer from the slower trade and tightening of credit lines that usually accompany a downturn. This combination of pandemic, Brexit and recession means that for thousands of businesses access to capital will be more critical than ever.

How Accelerated Payments works

Accelerated Payments works by advancing finance against invoices. This allows a business to improve their cash-flow since the cash is almost immediately available. Unlike traditional debt factoring Accelerated Payments work in a flexible way with SMEs; the SME chooses how many and which invoices they use, whether it’s just once a year or every invoice they send. This gives the client access to funds when they need, without incurring fees on every invoice or having to finance an ongoing credit line.

Accelerated Payments’ model also creates opportunities for businesses that might struggle to get more traditional finance. Because they assess the risk based on the buyer, rather than the SME, new businesses or those that have had a rocky period can get still get finance. It also means that clients aren’t rejected because of a concentration risk of a small number of buyers, frequently an issue with SMEs using banks for credit.

The company focuses on the B2B sector, especially professional services, who might have large outstanding invoices with major businesses. The service they offer is a light touch, simple model, with clients paying an annual fee and then selecting which invoices they transfer to Accelerated Payments. This is reflected in the easy-to-use portal for clients that makes their submission process quick and straightforward.

The model works well for smaller businesses who might be providing services for industry giants. For example, a recruiter might have found and placed a candidate but, although there is no credit risk, the invoice might take 60 to 90 days before payment. Meanwhile, other forms of financing might have an application process that takes multiple weeks. By comparison, an Accelerated Payments client would usually expect a decision, and the cash, within 48 hours.

This means that smaller businesses have near-immediate access to operating capital, helping to smooth cash flow and removing the pressure to chase for payments. For SMEs that can often invoice significant amounts, Accelerated Payments can make a significant difference to cash-flow, sometimes being the difference between success and failure.

Planned expansion

The company currently has €50 million (£44.2 million approx) of funding and plans to grow to €100 million (£88.5 million) by the end of the year. Based in Ireland, the fintech employs around 30 staff worldwide. The London office is expected to double in size over 2021 from six to 12 staff.

Meanwhile, North American operations are planned to grow from the Toronto base in Canada to start, initially, in the four north-eastern US states of Ohio, Massachusetts, New York and Pennsylvania. Initial discussions with potential partner banks are in progress, and they plan to launch services by quarter three.

As well as helping the company deliver on its ability to provide invoice financing in any currency, this expansion also reflects Accelerated Payments’ client-base. Although the UK represents the largest single market in which they operate, their UK book is largely denominated in global currencies, with around 60% being in US dollars.

This ambition reflects the optimism they have, not just for Accelerated Payments, but for the wider economy. With light finally visible at the end of the tunnel Duffy was confident of both the future but also of Accelerated Payments’ position and ability to help businesses through the remaining period of uncertainty: “Our most important message is that we are open for business. Our book is expanding, and we want to support SMEs through these really tough times.”