• Home
  • /
  • Internet
  • /
  • Fincheck strikes investment deal with FundingHub

Fincheck strikes investment deal with FundingHub

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 28 Aug 2019
Michael Bowren, CEO of Fincheck.
Michael Bowren, CEO of Fincheck.

Financial services comparison site Fincheck aims to become SA’s largest financial comparison site, after recently investing an undisclosed amount in alternative funding marketplace FundingHub.

Established in 2016, Fincheck is an online financial products comparison portal which provides transparent facts and figures on 71 different financial services products on offer from various financial services institutions in SA.

FundingHub connects alternative lenders and banks to SMEs looking for finance to grow their businesses. The firm started two years ago and has attracted average loan sizes of R300 000, with the largest loan being R72 million.

Following the investment, Fincheck has taken over the full management and equity in FundingHub, making Fincheck the country’s biggest financial comparison site, according to the company.

“Fincheck currently compares nine different banking verticals (personal loans, vehicle finance, vehicle insurance, life insurance, funeral cover, debt counselling and more), and our goal is to compare all verticals that a bank offers,” says Michael Bowren, Fincheck CEO.

“FundingHub allows SMEs to apply in under six minutes for business finance. A business may not know whether it needs equipment finance, unsecured or secured term loans, overdrafts, lines of credit, debtor finance, merchant cash advances or credit cards. The site simplifies the process by filtering options and offering quotes from the most appropriate funders for their business.”

Fincheck, according to Bowren, gets around 4 000 applications per day. While SA has a host of innovative alternative business finance companies, the company says its objective is to present these companies to business owners and help them make a better financial decisions based on an independent comparison.

SMEs that apply for funding on need to have been in business for a minimum of 12 months, with R1 million annual turnover.

Once the SME completes the application with one of FundingHub’s lenders, the lender will make an offer. The SME is able to apply to more than one lender and select the most suitable.

Following the investment, the company says it is looking to increase its distribution model and add business insurance onto the Fincheck platform.

“The business insurance comparison service will allow SMEs the ability to compare various insurers and get best cover options. Being 'front of mind' is key when it comes to business finance. In addition, the team is looking into various partnerships to reach a larger group of SMEs – informing the SMEs on the vast variety of options available to them as well as allowing them the ability to easily compare the market,” adds Bowren.

According to Dr Muriel Chinoda, MD of Business Engine, SA’s traditional banks remain stringent on lending policies, stifling growth prospects for small and medium enterprises.

The SA economy is growing more and more towards the informal and small enterprise sector, providing a ripe playground for fintech players, she notes.

“There are opportunities for fintechs in the areas of order or receivables financing, working capital financing and equipment financing. Point-of-sale transaction-based lending, where credit is extended using data or electronic transactions at point-of-sale and against future receivables, is one area that is now opening up using technology,” explains Chinoda.

Fincheck is a member of AlphaCode, an incubation and investment vehicle for early-stage businesses

Dominique Collett, head of AlphaCode, explains: “Business finance has come a long way since the days when SMEs had to approach their business bank manager, who didn’t know their business, who wanted a great deal of information and then would take around five months to revert with a no. Many of the fintechs on the FundingHub platform can put money in a business account within 24 hours.”