GoCardless has announced a strategic partnership with the US fintech company Pipe, aiming to provide embedded finance solutions for small to medium-sized enterprises (SMEs) in the UK. This initiative is designed to simplify access to capital for businesses and marks a significant development in the landscape of SME finance.
In recent years, SMEs have faced significant challenges in securing funding, often struggling with late payment issues and tight cash flow conditions. Approximately 52% of UK businesses have experienced cash flow problems due to late payments, with one in six SMEs actively looking for financing options. The collaboration between GoCardless and Pipe seeks to address these urgent financing needs.
The partnership follows a successful pilot program that ran earlier this year. By integrating Pipe’s capital offerings into the daily applications SMEs already use, the two companies aim to streamline the funding process. Luke Voiles, CEO of Pipe, highlighted, “Our mission is to empower small businesses worldwide with the financing and services they need to grow and prosper.” This partnership aligns with that mission, providing businesses a more fluid way to access capital without the typical hurdles posed by traditional lenders.
Pipe’s model enables SMEs to obtain funding quickly, often in a matter of minutes. Businesses can secure capital based on their performance, bypassing the lengthy underwriting processes that characterize many conventional financing routes. In fact, Pipe boasts a pre-approval rate exceeding ninety percent, offering peace of mind to SMEs that may have struggled with credit histories under previous lending models. Unlike traditional lenders, the funding sourced through Pipe requires no personal guarantees or credit checks, making it especially beneficial for micro and minority-owned businesses that often face more significant barriers to access capital.
The initial results from pilot programs have been encouraging. Approximately GBP £7 million in capital has already been advanced to GoCardless customers, and feedback reflects a resoundingly positive reception from users. Sam Brooksworth, Founder and CEO of Remoteli, shared his experience: “I was thrilled to receive an offer from Pipe through the GoCardless platform because GoCardless is a brand we trust. Everyone needs a financial partner in their corner to take your business to another level, and that’s what Pipe feels like.”
Jolawn Victor, Chief Growth Officer at GoCardless, expressed excitement regarding rolling out Pipe’s capital offerings to their customer base. The pilot program achieved an impressive Net Promoter Score of 88, reinforcing the intense interest and demand for such financing solutions. The anticipated full roll-out in 2025 signals GoCardless’s commitment to fostering growth and overcoming financing barriers for UK SMEs.
This partnership is particularly timely, given that many UK SMEs continue to grapple with the aftermath of the pandemic and its accompanying economic pressures. The collaboration between GoCardless and Pipe could indeed represent a turning point, reshaping how small businesses approach financing. By leveraging technology to expedite access to capital, these firms are redefining what it means to secure funding in a competitive landscape.
With over 5.5 million SMEs operating in the UK, the impact of this partnership can be substantial. As these businesses look for ways to stabilize and grow, the combination of GoCardless’s established payment infrastructure and Pipe’s innovative financing solutions may provide the vital support they need to unlock new opportunities.
In conclusion, the partnership between GoCardless and Pipe could transform the financing landscape for SMEs in the UK. By combining expertise and technology, they are not only improving access to capital but also enhancing the user experience for businesses that have traditionally faced numerous hurdles in funding. The results from initial tests signal strong demand for these solutions, and the full launch in 2025 is eagerly anticipated.
