The inside story of Swoop

From the heart of Ireland to Downing Street and beyond, Andrea Reynolds has been on a remarkable journey. Now, with the economic crisis set to continue the lessons she’s learned are helping SME owners take their businesses to the next level

WHAT SORT OF influences mould

a chief executive’s character? In the case of Swoop’s co-founder, Andrea Reynolds, intergovernmental relationships and pet food rank highly on the list.

When Andrea was at university in the 1990s, her father Albert was the Republic of Ireland’s taoiseach. “John Major was prime minister here in the UK,” she says, “and collectively they worked on the ceasefire in Northern Ireland. It was an incredibly interesting time, seeing how really it came down to human relationships and trust. I think it’s pretty much the same in business.”

By this point, she’d already set her heart on a career in business and accountancy, inspired by the family’s manufacturing operation in Ireland. “They supplied pet foods to stores like Sainsbury’s and Tesco, and I watched that grow from something so small to something so large. It was exciting to see what it did for employment, and for the town, so I think that’s where I got the bug for business from.”

Her particular interest in SMEs came later, after she’d trained with KPMG. With experience gained in the accountancy giant’s London office, she set up her own corporate finance firm. This brought her into contact with spinout companies from Formula 1, “and working with those types of innovative businesses, I would look at grants for them. I would look at R&D tax credits, getting loans for when they needed to acquire assets.

“It was there that I learned some universal truths about how difficult it is for a business to navigate the funding landscape. Not every business can afford a corporate finance advisor and I just thought, ‘This model is a bit skewed.’”

Groundbreaking research

Andrea’s eventual solution, Swoop – a technological platform that would scour the funding landscape on SMEs’ behalf, bring up the best deals in moments and provide backup in the form of human advisors – was by no means fully formed at this stage. A visit to Downing Street, this time when David Cameron was in charge, helped push the idea forward in 2016.

Utilising her talents as an auditor, she’d researched the UK’s system of awarding grants “and I discovered a lot of things that were going wrong”.

As it turned out, 71% of businesses had never applied for grants, and funds that had been allocated hadn’t been distributed. “It was costing the government almost £1 million pounds per job created,” she says.

“I got an opportunity to present that in Downing Street and they said, ‘This is a great piece of research. If you could build something to solve a lot of these problems, that would significantly help UK SMEs.’ I got a lot of confidence from that, and then I decided to build a prototype.”

Potential customers responded warmly. At the same time, developments such as open banking, cloud accounting and the ability to pull data from Companies House made the concept even more compelling.

“My prototype was built before open banking launched in 2018, but what open banking is doing is really significantly improving the experience,” says Andrea. “It’s speeding up the ability to get financed. It is being used more and more by lenders to actually make lending decisions, and so it truly is digitising a lot of what was a manual process.

“It’s also giving back insights to business owners on what lenders are looking at. Rather than you waiting to hear what the lenders think of your bank statements and what’s going on, we return that information to you, so you start to think like a lender and you start to think like a funder. You’re not intimidated by the process of when and how to go for funding. It’s a very powerful tool.”

A great deal of credit

When Andrea started her corporate finance firm, funding options were limited to high street banks and a tiny number of asset finance and invoice finance providers. “That was it. That was the market. Now you have hundreds of providers.”

She reels off several examples –fixed-term loans for three or six years, asset finance that ranges from £100 to millions of pounds – and discusses a newer innovation, revenue-based financing. “If you get your sales through credit card terminals or through your ecommerce platform, they will give you a loan and they will just deduct a percentage off your sales until it is repaid. If you have a bad month of sales, they’re only taking a small percentage of your sales from that month – so, lots of flexibility.

“The UK has the largest business finance market in the world outside of the US. Even with the volatility in the market, there is still a lot of credit to be distributed. That is the fundamental difference between the financial crisis we’re going through and the 2008 recession. In 2008, there was no liquidity in the market, no finance available whatsoever for businesses. This time around there is.

“It’s a very different crisis. It’s an energy crisis. It’s a supply chain crisis. It’s inflation. But it’s not a liquidity crisis.”

Andrea Reynolds

customer,” says Andrea. “It was coming to the end-of-month payroll, [the boss] didn’t have the cash to meet it, and we were able to get him an immediate cash injection into the business, an immediate loan.”

“He left us a message saying, ‘All of my employees have gone home tonight not realising how much stress I was under to meet that payroll. Thank you for saving not just me, but my employees this month.’”

The nuts and bolts

In practical terms, then, how do small business owners use the Swoop platform?

“They come on and they build their profile like it’s LinkedIn,” says Andrea.

“Just from you putting in your company name, we have pulled your data from Companies House, so you don’t have to go there and download the files and then pass them over to a lender. We’ve done that heavy lifting for you.

“Then we need you to tell us more about the finances of the business. Rather than filling out a long form, you can log in and allow us to pull the data from your cloud accounting software. We’re then able to produce the set of accounts immediately that the lenders want to see.”

Likewise, to save you the bother of downloading bank statements for the lender to look at, you can log into your bank account and give Swoop the read access to pull that data immediately.

“Within minutes, we are matching that against the lending criteria of lenders, of grant agencies that have grants available, etc. And we are saying to you, based on your numbers and your profile, here are the products that you are currently eligible to apply for, here are the amounts that you could apply for and here’s the typical cost of that finance.”

A further advantage is that all your details are now stored on Swoop’s system. This means that if you want to apply to Bank A, then decide you’d rather approach Bank B, the process won’t be remotely difficult or drawn out.

“Alongside that, we have a team of experts that talk you through the next stages – why you should consider one over the other – so you make a very informed decision,” says Andrea.

To be clear, Swoop makes its money from the providers, not the SMEs seeking funds. “We all know that when we take out a mortgage or a loan, whether it’s business or personal, there’s an arrangement fee. Providers now share that fee with platforms like Swoop, because we have done a lot of the work for them. We’ve basically lightened their load.”

Success stories

Swoop is going from strength to strength, but the most satisfying part of running it is seeing the profound difference it makes to SME owners’ lives.

“An example that really sticks out was when a fantastic business suddenly wasn’t paid by their largest

Another business won a massive contract that meant it had to build a new plant in northern England. “We were able to get them not just the private finance for the plant, but we married it with a grant as well, which significantly reduced the project cost and the cost of the entire fit-out for the factory,” says Andrea.

“In general, we see businesses from start-ups, right through their growth, and we’ve had known brands like Nimble Babies [which makes childfriendly cleaning products] and Holy Moly Guacamole. If you walk into any supermarket today, you will see them on the shelves.

“We help them from getting the first production run done to seeing them grow spectacularly across the country, year on year. That’s something I’m incredibly proud of.” Happily for its 80 staff, Swoop itself is a standout Swoop success story, growing 450% in the past year alone. The firm, based in London, Dublin, Toronto and Sydney, describes itself as its own best case study, drawing on grants, borrowing, R&D tax credits and, recently, £5.4 million in Series A funding.

“Every stage of finance that we recommend to our customers, we have been through that journey,” says Andrea. “So, everything we offer is tried and tested by Swoop itself.”