Aluna Partners, a global investment banking firm with expertise in arranging alternative credit, announced that it has agreed to purchase up to $10 million of receivables from SteadyPay, a fintech company based in the United Kingdom. Under the terms of the agreement, SteadyPay can draw up to $10 million in the next 24 months to finance its loan book expansion. This debt facility was designed to complement the recently closed $1 million equity.
 

SteadyPay is a fintech company that offers cash advances to individuals and small businesses in the United Kingdom. SteadyPay uses its cutting-edge proprietary credit scoring engine to derive potential borrowers’ affordability. By leveraging Open Banking data, SteadyPay can provide tailored financing solutions to small businesses and individuals who are typically overlooked by traditional banks.

The International Monetary Fund (IMF) forecasts the UK's economy to grow steadily, with an anticipated increase in nominal GDP from $3.2 trillion in 2023 to $4.3 trillion by 2028. This optimistic outlook is accompanied by a notable decline in the household debt-to-GDP ratio, suggesting a potential for increased borrowing amidst the cost of living crisis.
 

Despite a 1.7% decline in real wages in 2022, primarily due to a spike in energy costs influenced by global events, there's a silver lining. Default rates for both small and medium businesses and non-credit card unsecured lending have remained stable, indicating resilience among consumers and businesses alike. The IMF also anticipates inflation to gradually decrease to meet the Bank of England’s 2% target by 2025, further signalling an improvement in the economic climate and household financial stability.
 

Since the financial crisis, major high street banks have reduced their lending to small and medium enterprises (SMEs), creating a significant funding gap of £22 billion, as reported by the Bank of England. This shift has led to 60% of would-be-borrowers resorting to personal funds instead of going through the extensive process of getting approved for a corporate loan from a high street bank. In the UK, SMEs represent 50% of GDP and 60% of private sector employment, highlighting the substantial impact of this funding challenge on the broader economy..
 

“We are pleased to be supporting SteadyPay in this partnership, who are offering a valuable service by smoothing income volatility to help maintain living standards. Their proprietary credit risk assessment leverages cutting-edge technology developed by their experienced in-house team; when coupled with diverse lending products and a strategy for low-concentration risk, SteadyPay consistently achieves lower-than-average default rates in the industry. Their scalable go-to-market strategy, supported by strong strategic partnerships with rapidly growing neobanks, positions SteadyPay as a leading LaaS player in the UK.” said Stefano Sciacca, Managing Director at Aluna Partners.
 

John Downie, CEO at SteadyPay, added “Our unique position to tackle the market challenges, especially in supporting individuals and small businesses affected by the cost of living crisis and the banking sector's tightened lending criteria, is significantly bolstered by our partnership with Aluna. Leveraging our cutting-edge proprietary credit risk assessment and a suite of products designed to smooth income volatility, we are poised to deliver unprecedented value. Our collaboration with Aluna Partners amplifies our capacity to serve our customers and aligns with our vision to become the lifetime financial ally for gig-economy workers worldwide, ensuring their financial stability and fostering a stronger financial future.”