Updated: 21st October 2024.
From legacy high street institutions, through to the more recent new wave of challenger banks, the UK is awash with business credit options. There’s just one problem, however – and it’s quite a big one: none of these options deliver what mid-cap companies actually need.
Following on from the partnership announcement with NUMARQE, the London-based corporate-credit provider, we spoke to NUMARQE’s James Bowler to dive deeper into that model, and to explore how and why embedded finance works so well for this business…
Former CFO turned co-founder, James Bowler had seen first-hand what businesses were facing in terms of accessing credit and cash flow management. And from this insight came NUMARQE: an all-in-one credit platform where rigid credit limits are a thing of the past. Finally, mid-market entities have precisely what they need to simplify their payments process, optimise cash flow, and make the right financial decisions through valid data insights.
NUMARQE thinks big to address the needs of its customers. But in terms of realising that vision, it’s also a case of thinking smart. This is where embedded finance comes in: thanks to its partnership with Weavr, NUMARQE has the infrastructure it needs to build the features customers want, in rapid time.
Why does NUMARQE exist – and what problems does it seek to address?
NUMARQE’s mission is to optimise working capital for mid-market companies. And for James, this was a mission born out of experience: “As a former CFO, I was keen to build this product to address the problems I’d lived and breathed for many years”. These problems fall into three main categories:
- First – and particularly for those companies operating in multiple territories – there’s the ‘keeping the plates spinning’ element: having to manage relationships with a whole host of different banks, each with their own procedures and controls surrounding corporate payments, managing different currencies, and having to hedge currency risks.
- Linked to this is the visibility aspect. With lots of institutional relationships, you have multiple payments processes in play, so comprehensive payments data may not always be in one place. Consequently, businesses can find themselves lacking the level of granularity needed to understand their spend, and to analyse it to make smarter decisions.
- Third – and most crucial of all – is the problem of credit constraints. What businesses really need are flexible credit and payment terms that allow them to stay on top of cash flow. Even if you’re a buoyant, well-managed company (but one that hasn’t quite reached enterprise level), you typically find that unsecured committed credit lines are virtually non-existent, whether that’s from legacy institutions, or challenger banks.
James speaks of the resource-sapping rigmarole that companies are often faced with when trying to set up a credit line: “Thinking back to my previous experience of being a CFO, we would have to source credit lines from different banks. Also, we’d have to source corporate cards from different providers too, depending on things like the geography of the business – it might be American Express in the US, Barclaycard in the UK, and a completely different provider in Asia. As you can imagine, all these different providers have different back-end systems to work through, not to mention all the different currencies when dealing with a global business set-up.”
What is the NUMARQE solution?
NUMARQE has created an end-to-end payables solution; one that doesn’t just provide the tools necessary to manage expenditure anywhere in the world, but actually embeds credit into those payment tools.
In place of rigid limits, NUMARQE’S AI-driven credit engine can instantly assess a business’s financial health to offer flexible credit. With up to 90 days of interest-free credit on supplier invoices, users get that all-important breathing room to manage cash flow. And with corporate virtual credit cards – along with the option of extended payment terms – it has never been easier for businesses to define granular spend limits (e.g. on a category or employee basis), to maintain compliance and budgetary discipline, while simultaneously making the payments process pain-free.
As a result, users can pay any invoice in an incredibly seamless way. They can spend in any currency and pay back in the currency they operate in. The platform can also accommodate complex group structures, allowing credit allocations and expense management to be segregated across business entities without the need to manage intercompany payments.
But the key point is that ease of payment goes hand-in-hand with liquidity management: access to credit right at the point of purchase – in other words, right when users really need it.
Creating that solution: NUMARQE’S embedded finance opportunity
Why embedded finance for NUMARQE – and what opportunity does it bring?
NUMARQE pinned down an important truth about their target market. What customers care about is liquidity and ease of payment. What they don’t care about is the underlying infrastructure that delivers it. Embedded finance offered the opportunity to handle the latter in the most effective and efficient way possible, allowing NUMARQE’s internal team to focus their bandwidth squarely on getting the customer experience right.
Its corporate card product was an early priority for the NUMARQE team. But what about the technicalities and regulatory intricacies that come with rolling out such a product? James explains the company’s thinking: “Rather than building all the inherent technology layers into a MasterCard or Visa network, which would have required us to be regulated, we wanted to go to market as quickly as possible. Embedded finance was the way for us to do that.”
What research did you do when realising embedding finance was the option for NUMARQE?
For NUMARQE, it was a case of exploring embedded finance from scratch; speaking to providers and discovering what was out there.
Credit is a complicated beast; especially when your customer base comprises mid-market companies that require high finance limits. One problem identified by the company was the ‘take-it-or-leave-it’ approach of many providers: in other words, we can give you plug-and-play embedded solutions, but you have to play by our rules!
As James explains: “It was apparent that most of the setups were for corporate cards with a debit feature, or a prepaid feature only, which wasn’t applicable to us. In principle the architecture worked, but the way their infrastructure was designed meant they couldn’t accommodate the credit model into their build”.
Why did you choose Weavr?
James highlights how Weavr was able to ‘get’ what NUMARQE was trying to do from the outset. They recognised that NUMARQE’s target market had very specific characteristics, and there was no attempt to shoehorn ready-made solutions that failed to address those needs. One notable example was KYB (Know Your Business): NUMARQE had a need for specific KYB options, and Weavr was on board with their needs right away.
Weavr’s partnership approach was also a big draw:
“We really liked your team. They’re very attentive in all the calls and they made a lot of effort to hep us spec out what the right architectural flows would be. The attentiveness of Weavr versus other providers was vastly different. Weavr gave us that confidence from day one.”
As was Weavr’s obvious commitment to delivering long-term value:
“There was a reciprocated desire to be long-term partners, where our growth supports Weavr’s growth and vice versa which feels mutually beneficial”. The more features you offer us, the more we can offer our customers. We’ve got big ambitions and want to make sure what we build is right for our market first time, not over time. Weavr are aligned with our passion.”
The embedded finance solution: Thanks to Weavr, we can now…
Traditionally, to bridge cash flow issues, finance managers of mid-size companies were faced with a mostly fruitless search for unsecured credit lines. They had to juggle multiple banking platforms, manage different currencies, multiple sign-offs, and reams of manual reconciliations.
With the help of Weavr, NUMARQE enables its customers to overcome these problems:
“NUMARQE takes all the stress and hassle out of that by having an all-in-one platform to capture ‘when do I need the credit?”: it’s drawn down instantly and then allocated to the spending tools and to users/employees. It’s immediate, it’s visible, it’s all signed off and auditable, it’s all reconciled, it’s seamless”.
Key elements are as follows:
- For mid-market companies, a single transaction can involve a large amount of cash. Weavr has secured high credit limits for NUMARQE. This, combined with the company’s advanced credit engine, means users benefit from tailored payment terms aligned with their cash flow cycles. This includes extended invoice payment terms up to 90 days.
- Weavr has equipped NUMARQE with the ability to offer customers virtual corporate credit cards. It becomes possible for users to issue virtual cards instantly for specific transactions or vendors, setting custom limits and expiration dates for added security. The platform also automatically categorises transactions, saving users’ finance teams considerable time in reporting, and delivering real-time insights and control on corporate spending.
- This single global card program, complete with multi currency support means users can conduct transactions in any currency without the burden of excessive fees or unfavourable exchange rates – all in one platform.
- This translates to stronger real-time visibility and control of spend, alongside instantly-available credit that flexes with the user’s business.
How has Weavr impacted your business growth?
Embedded finance means no need to build out financial services capabilities from scratch, and no need to get bogged down in regulatory intricacies. The result? A faster time to market, and a more rapid growth trajectory.
NUMARQE has been a prime example of this:
“We were able to go from signing on the dotted line with Weavr to launching in just six months. That was a massive benefit for us – incredible. Especially as a lot of what we needed was bespoke to our business needs.
Being with Weavr has supported our business model and enabled us to service the right customer segments. In terms of growth, it’s about being able to offer things like onboarding fifty users in one go. Imagine if you had to do that one by one?”
Weavr’s architecture is easy to work with, which not only enables NUMARQE to build out features quickly, but aids in creating a seamless experience for users:
“NUMARQE’s users don’t need much training, because of the way we’ve designed the platform, and the way it interacts with Weavr is so simple. This results in an increased speed of set-up for the end user – we’re looking at days, rather than weeks or months. Our customers are happy getting stuck in (almost) straight away.”
How does embedded finance make you money?
After an earlier soft launch, NUMARQE hit the market in July 2023. Over the course of a year, the company has achieved an incredible 300% growth.
Embedded finance has played a massive role in allowing the company to achieve that growth:
“Embedded finance allowed us to have the product in the market, which doesn’t have to be built or regulated for ourselves. For us to do that without Weavr would have taken us two years to be licensed, onboarding a payment processor, onboarding a card bureau, and have the right collateral requirements.
Put simply, we’re making money today because Weavr has helped us get to market in such a short time frame.”
What does the future hold?
“We’re primarily focused on payable finance right now, but thanks in no small part to the scalability of Weavr’s infrastructure, there’s no reason we we won’t be able to provide other types of finance in just as a compelling way, for instance, receivables finance, and end-to-end procurement.
Geographical expansion may be on the horizon, too. We’re UK-focused at present. But with Weavr supporting us, there’s no reason why we won’t be able to expand into other areas”.
Find out more…
Inspired by NUMARQE’s story? To find out more about the potential of embedded finance, check out this ultimate guide.
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