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Growth Street: working capital for school lunches

Posted date: 13 August, 2019 Author: David Genn
Growth Street: working capital for school lunches-Goji Direct Lending Investment Experts

Reliable access to credit is essential for businesses who need to manage cash flows and working capital requirements. This can be especially true for SME businesses who can be exposed to seasonal trading or ‘lumpiness’ in their cash flow.

Traditionally companies have been able to look to their bank for a line of credit to give them the headroom they need. Since the financial crisis, banks have retrenched from this area of lending by 50% leaving an £18bn funding gap.

The last ten years have seen the rise of Direct Lenders who not only fill the gap left by banks but are leveraging technology to provide fast, hassle free access to credit. One of these Direct Lenders is Growth Street who specialise in providing overdraft-style lines of credit to UK SMEs.

Consider a supplier of school lunches – they (understandably) have a quiet period during the summer when they do not generate revenue and at the same time need to invest ahead of the start of the new school year. To cover this gap they looked to their bank who, despite their strong trading history, would not provide an overdraft. Growth Street was able to provide them a line of credit that allowed them to fund their future growth. This case study is typical of the kind of company that benefits from the flexible, technology-driven approach these new lenders are able to take.

Growth Street have been lending to UK businesses since 2014 and have facilitated loans of more than £100 million via their Growth Line product. Growth Line gives businesses a flexible, overdraft-like facility from £25k-£2 million.  

Powering UK SMEs remains at the heart of Growth Street’s growth objectives and they are currently expanding their sales teams in the Midlands and North of England, where the SME sector remains underserved compared to the South. Additionally Growth Street are helping companies access their products by integrating directly with banking providers such as Starling, on their marketplace. 

Growth Street also offers retail investors the opportunity to benefit from the democratisation of Direct Lending. Via their peer-to-peer product, investors can earn up to 5.3% pa in a 30 day access account or 5.8% in a one year ISA. Growth Street have more than 2,700 investors and to date, have paid out more than £2.1 million in interest. 

Goji are proud to count Growth Street amongst its customers, providing investment platform technology that powers the Growth Street ISA.