New AI Alliance Targets SME Cash-Flow Crunch as Late Payments Climb

A month ago, Funding Agent, a fintech that matches businesses with specialist lenders, quietly signed a data-sharing pact with M&A search platform DealFlowAgent. On its face, the deal looks technical, yet it lands when cash-flow stress among small and medium-sized enterprises is growing and regulators are tightening rules on slow payers. Already strained by high borrowing costs and wage inflation, cash-starved operators need faster, smarter funding routes.

Late invoices, thin margins

The Office of the Small Business Commissioner says 18% of UK SME invoices are paid late, leaving the typical firm £22,000 short and soaking up 56 million staff hours chasing debt. Meanwhile, the British Business Bank delivered £6.8 billion in finance to 28,000 firms last year and has a £25.6 billion mandate to do more. Demand is clear; speed remains the obstacle.

What the platforms bring

Funding Agent calls itself an “intelligent broker.” With the borrower’s consent, its cloud system pulls real-time bank feeds, Companies House filings and credit scores, then algorithms pair the applicant with one of 150 funders offering unsecured loans, asset finance, or invoice advances up to £500k.

DealFlowAgent uses so-called agentic AI, autonomous software agents that complete multi-step tasks. In M&A, they sift through documents, surface red flags and schedule diligence calls. Under the new pact, those agents will pre-screen Funding Agent applicants, fill data gaps and prepare draft term sheets.

Why agentic AI matters

Conventional AI predicts; agentic AI acts. In lending, that could mean fetching VAT returns the client forgot to upload, flagging inconsistent purchase orders, even booking a video-ID check, all in seconds. Analysts told The FinTech Times the approach could “compress application cycles from weeks to hours”.

For an SME, the payoff is tangible: upload documents once, receive a compliant offer the same day. DealFlowAgent, for its part, gains insight into thousands of growth-stage companies that may later seek buyers—creating a feedback loop neither firm could build alone.

Likely impact:

• Quicker liquidity: A 10 % cut in time-to-funding would save firms an estimated £45 million annually in interest and admin, using 2024 invoice-finance volumes as a baseline. 
• Regional reach: Eighty-four per cent of British Business Bank beneficiaries lie outside London; a digital-first marketplace could widen access further. 
• Competitive pressure: High-street banks, criticised for 54-day settlement times in some sectors, may be forced to adopt similar tools. 
• Regulatory test case: The Financial Conduct Authority wants “explainable” algorithms. Both firms say their agents keep an audit trail, but the claim has yet to meet courtroom scrutiny. 

Policy backdrop

Westminster plans to enforce a 45-day payment limit on large suppliers from October 2025. Better discipline will help, yet gaps will persist as long as buyers delay and sellers accept it. Faster finance can soften, though not solve, that structural lag.

Outlook

SME finance is shifting from paper forms to proactive software. If Funding Agent and DealFlowAgent integrate smoothly, they could set a template: lenders get cleaner files, borrowers get cash sooner, and regulators gain a clearer view of credit decisions. The real verdict will arrive when the first late invoice is paid using money sourced by an algorithm that wrote half the paperwork itself.