Fintech lender Sonovate has surpassed £3.5bn in total funding and £1 billion in annual funding for the first time as rising costs force businesses to seek finance to manage cash flow and drive growth.

During 2022, Sonovate provided businesses with £1.1 billion in finance, a 58% increase on the £700 million lent in the previous year, and more than double 2020’s figure of £444 million. Lending hit £312 million in Q4 2022 alone, up 30% from the same period in 2021.

Last year also marked the first time the amount of funding provided in a month surpassed £100 million, with Sonovate initially hitting this sum in October, then again in November when £110 million was loaned to businesses. This high was a 22% jump on the previous highest performing month, when £90m was provided to businesses.

Sonovate’s record performance was driven in large part by the expanding adoption of its business finance and technology services by consultancies, recruitment agencies and labour marketplaces throughout the world to allow them to pay contractors on time.

The increase in finance deployed to businesses was made possible by the securitisation deal with BNP Paribas and M&G Investments that Sonovate completed in Q3 2022. This deal added £165 million to Sonovate’s funding structure, increasing its capital efficiency and expanding its customer base, especially in the enterprise space, whilst delivering added flexibility for export financing.

The volume of funding provided to customers over the course of 2022 increased by 50% year-on-year as adoption of embedded finance models gains momentum. Meanwhile, enterprise customers* receive approximately one third of Sonovate’s total lending volume. This significant increase in volume demonstrates the continued growth in the use of contract and freelance labour, and indicates the market potential in the years ahead.

In September 2022, Sonovate surpassed £3 billion of funding since inception – an increase of £1 billion in just 12 months as the lender continues to scale at pace. Sonovate envisages continued strong growth as it expects to continue on its growth trajectory in the UK and plans to enter new markets.

Richard Prime (pictured above), Co-founder & CEO of Sonovate, commented: “Rising costs have presented many challenges, but ambitious businesses are embracing the opportunities to drive growth and increase their competitiveness by securing finance to invest in their workforce.

With workers demanding new ways of working in response to both the pandemic and the cost of living crisis, and businesses looking to reduce costs where possible, more and more companies are building their teams around a contract-based workforce.

Businesses benefit from this approach as they’re more agile to adapt to changing workload or cash flow and, as this trend continues, the need for on-demand funding will continue to soar.”

To date, more than 33,000 freelancers, contractors and gig workers in 44 countries have received payments from over 3,300 businesses supported by Sonovate. During 2022, Sonovate onboarded more than 170 new customers.

To support this growth, Sonovate is accelerating recruitment and aiming to expand to 230 employees during 2023.