The FundOnion lending model explained

Small business lending is long overdue a shakeup. FundOnion is doing that. The fastest ever loan secured through the funding platform took just 19 minutes - from account creation to the client’s funds being deposited into their bank account.

These sorts of speeds matter. Small businesses are not only vitally important to the livelihoods of millions, but also to the UK economy and its growth as a whole - after all, 99.9% of all businesses are SMEs. Unfortunately, this immense diversity in the SME community has meant that high street banks have found it difficult to provide fast and efficient finance via traditional funding and lending routes.

This has, however, led to the emergence of the alternative finance space that is growing rapidly to cater for the growing needs of SMEs.

We spoke to the CEO of FundOnion, James Robson, to understand precisely what he's offering.

Hi James! Why did you set up the business?

Finding a way to navigate the future of small business lending is exactly what FundOnion was set up to do.

In my time as a business finance broker, I could see the problems that were pervasive in the industry: it was fragmented, opaque and often didn’t have the business’s best interests at heart. I, alongside my co-founders Neil Cassule and Tim Plummer, wanted to create a platform that was more transparent, faster, and handed back control to the businesses we catered for.

When working with Neil at a traditional brokerage, neither of us were happy with the lack of options, lack of transparency, and the time it takes to get the finance you need to grow your business. Our core focus in setting up FundOnion was to change the industry by creating a customer-led, tech enabled platform that could help SMEs navigate the space easily.

How is FundOnion different?

We are an AI-backed business loans comparison platform that allows SMEs to quickly compare the cost of financing from over 30 providers and secure funding in a faster and more transparent way. We are the only platform that shows lending options upfront in less than 90 seconds, requiring only minimum information to be provided by the business applying for the finance.

The platform pools the different options from loan providers including iwoca, Funding Circle and YouLend, showing interest rates, how much you can borrow and the costs.

Our technology helps business owners to easily see which loans their business is most qualified for across the range of providers and to analyse documents, including bank statements and financial accounts, to triage applications and deals faster. It goes without saying that this is a world away from the drawn-out processes with traditional lenders or going through a traditional brokerage.

By working with a range of lenders and facilitating large numbers of loans, we are able to offer rates and terms unavailable elsewhere in the market. This has already proved popular, with over 8,000 small-and-medium sized businesses searching for half a billion pounds of finance on our platform to date.

Our rivals require reams of data from businesses before they start the process of showing available loans, and most just promise they'll be in touch soon. Our priority is providing information on banks to borrowers rather than information on borrowers to banks like our rivals do.

What does the future hold?

We want to help SMEs unlock their growth capabilities by helping to plug the estimated £22 billion funding gap that currently exists as a result of the reticence to lend to this section of the business community. Part of this is a desire to help SMEs contribute to the growth of the UK economy, through the availability of growth finance but, also down the line, our AI proposition and potentially a wider range of credit products.

Allowing businesses to see exactly what the loan they are applying for is going to cost them, how much the fees are as well as the term length, and then comparing and contrasting this instantly with other lenders, is a totally new way of doing things. It’s how we think it should be done and we are entering an era of technology, with the advent of AI, that allows us to do just that.