iwoca launches iwocaPay to support businesses during payment crisis<\/p>\n<\/p>\n
As the government announced<\/a> a \u00a310bn trade credit insurance scheme on 4 June, small business lender iwoca launched payments solution iwocaPay<\/a>\u00a0which removes invoice chasing and gives small business customers flexible payment options.<\/p>\n iwocaPay removes payment term risk by offering customers flexible repayment terms, while\u00a0immediately paying the supplier in full. Customers are offered a free 30-day payment plan, or can spread the cost over 90 days. The payment mechanism eliminates invoice chasing for the supplier with a non-recourse alternative, while\u00a0helping customers manage their cash at the same time.<\/p>\n \u201cHelping both suppliers and their customers manage cashflow, we believe iwocaPay will become a key tool to help SMEs have greater confidence as they get back to business,\u201d iwoca head of ventures Lara Gilman told AccountingWEB.<\/p>\n According to iwoca, suppliers and customers can check their eligibility<\/a> for iwocaPay in under five minutes with no paperwork needed. On approval, suppliers are paid in full for invoices between \u00a3150 and \u00a315,000 when the customer opts to use iwocaPay, with\u00a0iwoca\u2019s page<\/a> clearly stating: \u201cWe\u2019ll never ask you [the supplier] for the cash.\u201d<\/p>\n The customer can choose\u00a0either the 30-day free payment option or a 90-day payment plan and are free to make payments at any point during the selected timespan.<\/p>\n \u201cExisting alternatives like invoice finance and trade credit insurance only partially address the imbalance between suppliers and customers,\u201d said Gilman. While invoice finance solutions help suppliers access cash, they still bear the risk of customer non-payment with most of these solutions. Trade credit insurance guarantees the invoice, but the claim payout ranges from 60 to 120 days after delinquency, leaving suppliers with another cashflow gap.\u00a0<\/p>\n \u201cNeither solution has a track record of adequately addressing the needs of the SME to SME market,\u201d said Gilman.\u00a0<\/p>\nHow does it work?<\/strong><\/h3>\n
How does it differ from existing finance?<\/strong><\/h3>\n
Reason behind iwocaPay<\/strong><\/h3>\n