B2C Lending vs. Invoice Financing: A Different Approach to Risk
In consumer lending, evaluating risk is relatively simple. Lenders look at credit scores and transaction history to quickly assess a borrower’s financial health. They can approve loans in minutes, giving consumers fast access to credit.
Invoice financing, however, is more complicated. Here, lenders not only assess the business (the seller) but also the buyer who is responsible for paying the invoice. Since the lender often doesn’t have a direct relationship with the buyer, assessing their ability to pay adds an extra layer of complexity.
Why Real-Time Invoice Financing Is Challenging
One major roadblock for SMEs seeking financing is the lack of real-time data. Lenders rely on traditional sources like financial statements and reports from data brokers such as Dun & Bradstreet, but these are often outdated. Other key information—like trade records or proof of delivery—is still gathered manually, slowing the process down.
The biggest hurdle? Lenders don’t have enough up-to-date data to make quick decisions, making real-time financing hard to achieve.
The Path Forward: Smarter Data and Open Banking
Is it possible to speed things up? At Invoys, we believe it is. The growing availability of real-time financial data through Open Banking, along with new regulations like PSD3, means lenders can access more timely, accurate information than ever before.
But just having financial data isn’t enough. To really understand a company’s risk, we need to look at the bigger picture—combining information from accounting systems, ERP platforms, and invoicing software. This is what we’re focused on at Invoys: bringing together all these different sources of data to give lenders a more complete view of a business’s financial health.
By integrating sales records, invoices, and cash flow data, we can help lenders make faster, more informed decisions. This means SMEs can access the financing they need, without unnecessary delays.
Looking Ahead
In the coming weeks, we’ll be sharing more about how Invoys is working to improve invoice financing for SMEs. From gathering smarter data to improving decision-making, we’re committed to helping businesses get the support they need, when they need it.
At Invoys, we’re not just looking to the future—we’re actively building it.
Reach out to us to learn more about how we can help your business thrive with smarter, faster invoice financing solutions.
