Here are the week’s main news stories in the world of small business and digital payments:
British Business Bank lends £500 million to UK small businesses
The British Business Bank’s Start Up Loans programme has lent £500 million to UK small businesses since it was set up in 2012, according to official figures. New data from the government-backed scheme shows it has issued a total of 63,920 loans to fund small business across the UK, with the average loan amounting to £7,823. Of those who received a loan, almost two-fifths were women, one in five came from black, Asian and minority ethnic communities (BAME), and more than a third were unemployed when they applied for the loan, reflecting the diversity of the UK start up community.
JP Morgan launches digital cross-border payment in China
JP Morgan has launched its E-Customs Payment Solution, making it the first foreign bank in China to offer a service that fully digitises and automates cross-border payments of goods. Importers in China are required to provide supporting documents to their banks prior to making payments to overseas suppliers. With the E-Customs Payment Solution, JP Morgan’s clients in China will only be required to send the payment instructions with a linked customs declaration number. Using APIs, the solution then retrieves the relevant customs declaration status from the local authorities via the Shanghai international trade single window in real time and process the payments automatically.
Directors to have SME payments responsibility
Directors of large companies are to be held accountable for supply chain payment practices for the first time under government proposals to help SMEs get paid on time. A package of measures unveiled by small business minister Kelly Tolhurst includes proposals for new powers for the Small Business Commissioner to tackle late payments through fines and binding payment plans. The measures also propose that company boards to be held accountable for supply chain payment practices and suggest a new fund to encourage businesses to use technology to simplify invoicing, payment and credit management.
Bank of England backs data platform for small company loans
The Governor of the Bank of England, Mark Carney, has said the UK central bank will lay the groundwork for a new platform to help small companies get loans by having key underwriting data in one place. Lenders would be able to access credit and other data held on companies on the platform to speed up lending. SMEs employ 60 per cent of the UK’s private sector workforce and contribute half of British GDP, according to the Bank of England. However, there is a £22 billion funding gap in the SME loan market, with Carney saying the problem for small firms is that the assets they are seeking to borrow against are increasingly intangible – such as the brand or user base – rather than physical machinery or buildings.
Google Pay expands PayPal integration for online payments
Google Pay and PayPal have expanded their partnership so businesses can accept PayPal with Google Pay for their apps and websites. This should make the payment process easier for e-commerce for merchants and end users in the 24 countries where Google Pay accepts PayPal as a payment method. Customers who already have their PayPal account connected to their Google Play services, or other Google accounts, will now be able to choose their PayPal account when paying with Google Pay online. Users will also not need to sign in to PayPal when they use it with Google Pay. Customers will also be able to use their other benefits like purchase protection and return shipping.
In related news, PayPal has launched its first UK business debit Mastercard, offering its business customers instant, worldwide access to their PayPal funds for online and high-street business purchases and unlimited cashback on their spending.
Two-thirds of small business owners ‘get sleepless nights over valuations’
Two-thirds of UK small business owners say they get sleepless nights over company valuations, according to new research. The latest MarketInvoice Business Insights survey found that 66 per cent of SME business owners said their biggest priority is increasing their company valuations. Despite the focus on driving value growth, only 30 per cent of businesses increased their valuations by more than 10 per cent in the past 12 months, the survey revealed. Business owners in the education sector are particularly concerned about value, with 81 per cent in the sector describing it as a priority.