IPO giant Worldpay will start to offer loans to small business using big data

Billy Bambrough
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Worldpay will use the data it gathers from its credit card processing business to calculate loans (Source: Getty)

Worldpay, the card payments processor that recently picked up the crown for the biggest London IPO of the year with a value of £4.8bn, is expanding its US small and medium sized business lending into the UK.

The division, known as Worldpay Business Finance, will use its extensive data on its customers to offer them a cash advance that will then be paid back from their future credit and debit card sales.

Worldpay was a part of Royal Bank of Scotland until the bank was forced to sell it in 2010 as part of its bailout package following the financial crisis.

Small businesses in the UK have often complained that it is still difficult for them to get funding due to the credit crunch, with around 50 per cent of loan applications from first time SME borrowers are rejected, despite significant government intervention.

Dave Hobday, UK managing director at Worldpay, told City A.M.: “We have this huge amount of data. Being a part of RBS for so long meant we had a plenty of time to scale up.”

There has been a surge in firms lending in this way over recent years, but it has taken businesses time to grow.

Hobday said: “The costs of entry are extensive. The near 300,000 customers on the books we have puts WP in an unparalleled position.”

“We have access to small transaction in near real time and understand a lot about our customers,” Hobday added.

The limit on loans is relative to each company and is equivalent of the businesses month’s card takings.

Worldpay will be partnering with SME lender Liberis to make the loans.

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