As economic uncertainty for UK SMEs increases, invoice insurance provider Nimbla has teamed with SME credit risk assessment platform, Wiserfunding, to enhance the availability and pricing of commercial credit insurance.
The move seeks to ensure that SMEs can continue trading and prevent the UK economy from stalling, as the recovery from COVID-19 continues.
Flemming Bengtsen, CEO & Founder of Nimbla, commented: “SMEs can become vulnerable overnight if their customers become insolvent, and this risk is exacerbated by the challenging economic conditions that COVID-19 has created. We are integrating Wiserfunding into our platform to improve our risk management and enable quicker and more accurate insurance decisions, reducing the risk of defaults. Fundamentally, this will allow SMEs to trade with security and confidence.”
The partnership has been announced following research from the British Chamber of Commerce showing that the majority of SMEs have just three months, or fewer, of cash reserves to keep them afloat.
Gabriele Sabato, Co-founder and CEO of Wiserfunding, added: “With 500,000 SMEs already in significant financial distress, we need to move quickly to protect the backbone of the British economy and ensure the right companies are protected from harm.
“Commercial credit insurance is the key to accelerating economic recovery, but trade credit is facing significant challenges and may disappear entirely during this difficult economic period – increasing the magnitude and length of the recession we are about to enter. Nimbla’s mission aligns with Wiserfunding’s in ensuring that credit and insurance are delivered to the right SMEs at the right price.
“By combining the best innovations from the fintech, insurance and risk management worlds, we will be better positioned to support UK SMEs and mitigate the impact of the recession.”
As part of the integration with Wiserfunding, Nimbla is able to more accurately assess and appropriately price the risk of insuring invoices. This supports its goal of safeguarding SMEs against insolvent customers, particularly relevant during economically challenging times such as the COVID-19 pandemic where SMEs will be reliant on cash flow to maintain liquidity.
By decreasing the amount of SME that could become insolvent, the partnership aims to reduce the magnitude and length of the impending recession.