ALIBABA Group Holding Ltd. has enlisted two U.K. startups to provide financing for small British businesses looking to buy from Chinese suppliers, aiming to help cash-strapped firms access China’s economy.

    The partnerships with iwoca Ltd. and ezbob announced by Alibaba yesterday are a first for the Chinese firm in Europe, and are intended to provide short-term working capital to businesses that otherwise would have trouble securing funds from banks.

    Its British arrangement is similar to its recently announced tie-up with LendingClub Corp. in the United States.

    British firms looking to source cheap components or goods from Chinese suppliers apply for credit online, the startups review their business track records, tax returns and other data then provide a swift decision.

    “We want to make financing as easy as possible for the millions of British companies that do business through Alibaba.com,” said Wei Duan, Alibaba.com’s European marketing and business development director.

    Unlike LendingClub, a peer-to-peer loans matching service, ezbob and iwoca would provide the financing themselves. They already lend to Amazon.com and eBay merchants.

    Ezbob gets its name from the British colloquialism for a shilling and is the trading name for Orange Money Ltd. The four-year-old company is backed by the British Government’s Angel CoFund and its loans are guaranteed by the European Union.

    Iwoca has secured financing from investors including Global Founders Capital and Redline Capital.

    Both will be providing micro-loans of 50,000 pounds (US$75,315) and up to qualified firms at anticipated interest rates of 0.75 percent to 2 percent monthly. Iwoca chief executive officer Christoph Rieche said in a statement he expects to finance some 100 million pounds of deals over the next 12 months. Funds are channeled directly to Chinese suppliers. (SD-Agencies)