55085Ensuring SMEs have access to capitalClosedFeasibility StudiesInnovate UKThe COVID-19 Situation has exacerbated a pervasive problem: Smaller U.K. companies (SMEs) often struggle to grow and invest in people (jobs), marketing (sales) and equipment (capacity) because of cash flow constraints. Typically, these constraints arise from a) being paid late by the customer, and b) limited access to institutional (bank) capital to invest in the business. Larger customers are notorious for paying their suppliers late because they too are managing the cash flow problem, only at a much larger scale: _"Large companies with lots of buying power carry substantial leverage in negotiations with suppliers. Delayed payments can free up working capital enabling finance chiefs to **strengthen financials at the quarterly close.**"_ - Wall Street Journal (U.K. Companies Penalized for Failing to Pay Suppliers on Time - July 17 2019) SMEs are left with three options: 1) Wait for customers to pay, 2) Apply for bank financing, or 3) Apply for invoice factoring. All of the above have their challenges. Banks have largely been uninterested in SME financing because the cost of due diligence outweighs the benefits of, what are typically smaller loans. Invoice factoring is more expensive to the SME (due to higher invoice fraud risk) and only partially funds the requirement. But primarily, **all of the above take time** - which is critical to solving the **immediate** cash flow problem. Enspan's supply chain financing innovation is to **immediately** advance cash to SMEs against the **actual deliveries** recorded by their customer. By this time, there is hard proof that the customer has taken custody of the goods and has an obligation to pay the SME based upon Purchase Order Terms. The credit rating of the customer is used to determine the interest rate of the SME (which is typically much more attractive than the SME's own interest rate). Enspan's current supply chain platform facilitates digital receiving of goods and provides proof of delivery. We propose to open this delivery information to institutional and retail investors as a way of connecting SMEs with pools of funding - bypassing traditional banks and invoice factoring points of friction and dramatically speeding up access to capital which is critical to keeping SMEs in business, protecting jobs and keeping the U.K. competitive. A byproduct of this is that it has the potential to connect pools of capital (largely private and seeking yield) with new investment opportunities and allow investors to directly support the nation. --- ADDITIONAL INFORMATION HERE --- During the extension, Enspan will conduct end-to-end testing activities with a lending partner to validate key features of the platform and ensure our lending partner is able to access data required to make the lending decision and ensure all relevant data is available from SMEs. Additionally, during these three months we will validate onboarding requirements for SMEs (KYC/AML, technical, process) and will create onboarding materials (playbooks) to facilitate onboarding activities.