The grant will be used to assist in expanding services to 3.5 million sole traders and younger SMEs.
Fintech business lender MarketFinance has been awarded a £10m grant from the Capability and Innovation Fund (CIF), according to Banking Competition Remedies (BCR).
The grant will be used to assist in expanding services to 3.5 million sole traders and younger small to medium enterprises (SMEs).
In addition, the funding is designed to create more business lending products through which customers will be able to personalise finance options to suit their needs.
The money will also be used to build on partnerships with Barclays and Ebury to create a wider digital experience for customers and generate 200 jobs across the UK.
MarketFinance has been accredited to lend under the Coronavirus Business Interruption Loan Scheme (CBILS), providing term loans from £50,001 to £150,000 and revolving credit facilities from £50,001 to £5m to UK SMEs.
The Fintech business lender will be matching the £10m grant with its own money.
Anil Stocker, chief executive of MarketFinance, said: “We are delighted to receive this award.
"We will provide more businesses with a unique digital offering that allows them to get on with the day-to-day running of their businesses, giving value back to customers and bringing some much needed competition to the business lending market.
“This is a difficult time for UK businesses who are desperately trying to find the right finance to keep their doors open.
"We know that customers find it hard to manage multiple finance products across multiple providers; it is why many stay with the incumbent banks.
“We know smaller SMEs and sole traders make up more than 90% of companies in the UK, yet they are at the greatest borrowing disadvantage.
"Our risk models are much better at understanding and serving these businesses than those of conventional lenders.
“It is our ambition to get £1bn out to thousands of underserved SMEs in the next few years.”
Richard Anderson, chair of BCR, said: “We know that the winners and all SMEs in general face challenging times as we head towards winter with both the COVID-19 pandemic and the resulting economic challenges ahead.
“For that reason, it has been exciting to see a very wide range of innovative approaches from so many applicants to supporting all sizes of SMEs in their banking needs.
“It has been difficult to narrow the awards down to a small number of outstanding winners and BCR looks forward to monitoring progress as they implement their programmes."
