The decision aims to help cash-strapped companies access China’s economy. The Alibaba’s partnerships with iwoca and ezbob, two finance providers for small businesses across the UK, are intended to provide short-term working capital to businesses that otherwise would have trouble securing funds from banks.
Its British arrangement is similar to its recently announced tie-up with Lending Club in the US.
British companies looking to source cheap components or goods from Chinese suppliers apply for credit online; then the startups review their business track records, tax returns and other data, and then provide a swift decision.
Unlike LendingClub, a peer-to-peer loans matching service, ezbob and iwoca would provide the financing themselves. They already lend to Amazon.com and eBay merchants.
Both will be providing micro-loans of GBP 50,000 (USD 75,315) and up to qualified firms, at anticipated interest rates of 0.75% to 2% monthly. Funds are channeled directly to Chinese suppliers.
Alibaba’s executives have said they are looking for similar providers to extend financing beyond the US, to markets such as Australia, Germany and Canada.
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