Cashplus Bank, Equifax launch Business Creditbuilder

Available as a free add-on to fee-based Cashplus business accounts, the feature will structure the customer’s monthly account fees as an interest free loan. 65% of new UK businesses are refused credit and independent research commissioned by Cashplus estimates a GBP 6 billion ‘lending gap’ between SME credit demand and available credit (Based on third party consultancy estimates of credit exposures of sole traders, micro and small enterprises, and not including medium enterprises). The new Business Creditbuilder tool will support these businesses by upgrading Cashplus’s Creditbuilder for consumers. 

The company has now collaborated with credit reference agency Equifax to provide an equivalent product for small and medium size businesses by leveraging a 1-year fix term loan that is payable over 12 months at 0% interest. The 12 payments and repayment of the entire loan will be captured at Equifax and will result in helping improve businesses credit score, a requirement that will help businesses get accepted for future loans at attractive rates. 

Recent changes to the way Equifax and other agencies calculate business risk, including consideration of a wider range of credit facilities and more frequent reporting, mean business credit scores are now more dynamic and less biased by semi-annual or annual performance. This means Creditbuilder reporting can now make a meaningful difference to a company’s score, particularly for new businesses where it may be one of the few reported factors. The product will go live in early 2022.

Cashplus is also launching a new Business Credit Card offering 1% cashback for UK sole traders and small businesses who often struggle to secure affordable lending. To tackle this issue, the company uses advanced underwriting techniques and a ‘low and grow’ approach that recognises the often-modest credit needs of new businesses. The company is announcing plans to deliver GBP 5 billion of new SME lending through the product over the next five years and the ambition to lend to 100,000 new customers in the next 12 months. 

The product is part of the Mastercard green card scheme, which will offer an eco-friendly degradable contactless card to customers. Cashplus has plans to further improve the product in 2022 with new Open Banking-enabled payment functionality that will allow customers to make and receive Faster Payments using the credit card’s account number and sort code. At this point it benefit from the Confirmation of Payee system.