Growth Street plans to lend £1bn to companies by end-2022

Growth Street plans to have £1bn out on loan to small businesses in attempt to plug £18bn funding gap left by high-street banks

EXCLUSIVE: Growth Street, the fintech which has lent over £100m to small business since 2014, wants to lend £1bn by the end of 2022.

Currently, Growth Street has £36m out on loan to companies – double the amount it had out to growth businesses the previous year.

Operations director Julie Ashmore says Growth Street wants to turbocharge the total it has out on loan to £1bn within 30 months.

Ashmore said: “When I joined, we were lending £16m each year. Today, we are lending £36m. We have a four-year plan to become a £1bn business.

“Since the financial crash in 2008, the banks have dialled back their overdraft volumes by 50pc. In that same time, the number of UK SMEs has risen by 30pc, creating a £18bn funding gap. Growth Street aims to plug a billion of that funding gap.”

GrowthLine, its financial product, is a hybrid between an old-fashioned overdraft and invoice finance. However, it is more sophisticated as Growth Street bases its lending decisions on real-time access to the borrower’s cloud accounting system. The financier recently signed a deal with Xero.

Revolving credit

Like invoice finance, Growth Street lends against the value of outstanding invoices owed to a business. And, like an overdraft, Growth Street offers small companies a revolving credit facility, which fluctuates according to a business’s needs. However, its risk analysis also factors in the value of stock as well as what it calls work-in-progress – unfinished jobs or products to be assembled.

This year, Growth Street raised a total of £17.5m of backing in two funding rounds led by Merian Chrysalis and Arts Alliance.

Growth Street currently employs about 70 people, with newly opened offices in Manchester, Birmingham, Leicester, Glasgow, Cambridgeshire and Essex, in addition to its London headquarters.

You can read the full interview with Julie Ashmore here

Further reading

NatWest launches digital invoice-finance service as alternative to overdraft