‘We are able to lend where the banks can’t.’
That is how chief executive Katherine Chan describes her business, Juice – a lender which provides some of the UK’s smallest businesses with the funds to start up, run and grow.
Founded in 2019, Juice is one of a number of fintech startups shaking up the world of small business lending, sharing the space with the likes of Iwoca and OakNorth.
Chan, who comes from a corporate banking background herself, says these businesses are thriving because they recognise that the way small firms measure their value has changed.
‘Banks would traditionally favour asset-heavy businesses where they can assign collateral value to the lending,’ she says.
‘A lot of these businesses these days, they’re online, they’re digital, they’re not asset heavy.’
Finding funding as a small business has always been a challenge, but it is now increasingly difficult for them to find the capital they need.
Katherine Chan, chief executive of Juice. Founded in 2019, it is one of a number of fintech startups shaking up the world of small business lending
Big banks have abandoned small businesses
According to 2023 data, bank loans were used by 47 per cent of SMEs with over 100 employees.
But among smaller businesses, just 36 per cent were accessing bank lending, according to figures from Shawbrook Bank.
Some 43 per cent of applications were declined funding during 2024, SME Finance Monitor says.
Meanwhile, 2024 data from Zempler indicates that just seven per cent of small businesses sourced funding through a business loan, revealing how small a role major lenders play in the everyday functioning of the country’s smallest businesses.
That, Chan says, is where Juice comes in.
‘We know how important SMEs are to the UK economy – around 99 per cent of businesses in the UK are SMEs,’ she says. ‘But for banks, their risk appetite is not the same as a challenger capital provider like Juice.’
As a result, challenger lenders like Juice are taking over the SME lending market. Chan says challengers are ‘bridging a gap where the banks are not stepping up to the plate.’
But what is it that enables Juice to lend where banks won’t?
According to Chan, the fintech lender has a wealth of data at its fingertips, and leverages the power of artificial intelligence when assessing loan applications.
She says: ‘We look at a multitude of different data sources. We use AI to empower our decisioning as well, and it takes into account other factors in the business, which then we can attribute value to.
‘So where the banks say no, we can say yes.’
Loans within 24 hours
It is in data that Juice has its real strength. The lender, according to Chan, pulls together card terminal data, marketing data from Meta and Google, cloud accounting and open banking to create a ‘360-degree view of the business’.
‘These data feeds are in real time, which means we are seeing things slightly differently to the bank,’ she says.
‘It allows us to make decisions very quickly. We can offer loans within 24 hours, whereas with a bank it could take a couple of months.’
We are human, and bias resides within us – but using AI, we can make decisions on the pure merit of the business
For a small business, this could make a world of difference.
More recently, Juice has begun drawing on the power of AI to aid this decision making, using predicitive analysis to project the revenue and cash flow that a business can expect in future months, so that customers can be offered a suitable amount of credit.
Chan says: ‘AI just strips away that human bias. Sometimes, whether you like it or not, we are human, and there is subjective bias that resides within us.
‘Leaning on AI, we can make decisions on just the pure merit of the business itself.’
This goes back to Juice’s aim of being able to successfully lend to businesses that might have been turned down by banks.
Chan, whose career includes stints at the likes of Deutsche Bank and Commerzbank, has not completely turned her back on her former employers, though.
She said: ‘I think one of the answers is for the banks to work more closely with the challengers like Juice.
‘Challengers have the tech, the infrastructure, the data feeds, we have the setup to be able to respond to the SME business owners by providing the amount of capital that they need, in the form they need it, and in the time that they need it.’
Chan makes no bones about the cost of a loan from Juice.
‘We are more expensive,’ she tells This is Money.
As a small lender, it would be impossible for Juice to compete with the rates offered by big banks who have ready access to cheap capital.
Instead, she says, small businesses like that Juice can make fast decisions and be a ‘reliable funding partner.’
Chan adds: ‘It is about giving businesses capital on hand when they need it, offering a product that is actually suited to small businesses, and taking in multiple data points so that the decisions that we provide reflect where the business actually is in terms of its credit worthiness.’
If big banks and smaller lenders worked together, Chan says they could really make a difference to how businesses borrow money.
‘One has the capital, and the other has the analytics and the data,’ she says. ‘The two need to work together to be able to solve and unlock growth and innovation in the UK economy.’
‘Juice helped us grow our furniture firm’
Juice offers funding for small business from just £50,000, and up to £1million as a revolving credit facility. The facility is usually offered on a 24-month basis.
Chan said: ‘Borrowers don’t need to take out the full amount, if they had a £1million credit line for example.
‘It’s like a credit card – they take what they need, and then they can take another loan the very next day if they wanted to, and they keep on repaying, and redrawing.
Juice says it has lent millions to UK businesses since its launch.
Chan said: ‘It’s all about matching and understanding the needs of the business, and giving them as much flexibility as possible’
Samuel Thomas Moseley’s business, Grain and Frame, uses Juice’s credit facility
For many small businesses, especially those with seasonal revenue generation, cashflow can prove problematic in the lean months.
Chan says its two-year loan facilities mean business owners can ‘feel comfortable with the knowledge that they will have continual access to the funding as and when they require it.’
Chan added: ‘During their peak season and during seasons where they don’t need to do a stock run, for example, the loan can just lay dormant, and they only need to pay for what they use.’
‘It makes no sense for that business to be taking on a term loan with a bank where they have to start paying down when they haven’t even started generating the revenues yet.’
One firm, furniture importer Grain and Frame, has been able to use Juice to smooth over periods of lower sales due to its heavily seasonal revenue generation.
Samuel Thomas Moseley, co-founder of Grain and Frame, told This is Money: ‘Our big peak is in the run up to Christmas. Because of the lead time in production, we started ramping up production orders in in March.
Grain and Frame was able to borrow from Juice in order to fund production, before they had made sales in the run up to Christmas.
‘We could say “this is where we think we’re going to be, these are all the reasons that we think we can achieve it”,’ Moseley says.
This kind of funding has also helped to scale up the business, and in turn save on costs.
He adds: ‘We’ve been able to move to a larger supplier, and drive the cost of the product down through this bigger supplier… we’ve also been able to get more inventory.’
‘Yes, there’s an interest rate associated with it that we pay each month, but by being able to go into some of these bigger suppliers, we were able to gain that back.’
