Lemon, in collaboration with Shawbrook Bank, has launched a lending product to improve cash flow for Software-as-a-Service (SaaS) vendors.
Lemon’s product aims to enable SaaS companies to be paid up-front for their annual or multi-year subscriptions to their SaaS services, whilst allowing their SMB customers to maintain achievable monthly repayments at a cheaper rate than annual contracts.
The company has emphasised the importance of Shawbrook, stating that the bank’s finance element will “vastly increase the capabilities” of its product and allow it to be scaled much more easily in the future.
Matt Bird, CEO and Co-Founder of Lemon, said: “Collaborating with Shawbrook is a testament to the market demand for a SaaS financing solution that helps both the buyer and seller win, but also adds value to the banking ecosystem, and we’re proud to be integrating Shawbrook’s lending products into Lemon’s current offering.
“The finance element will vastly increase the capabilities of our existing product, allowing us to onboard and service a huge variety of SaaS vendors who need to reduce their current customer churn, and at the same time, reduce costs for their customers.
“The knock-on effect of this could be extraordinary, and we can’t wait to see our visions and ideas for better SaaS financing solutions become a reality through this collaboration.”
Lemon noted that a key motivator for this product was the traditional difficulties fintechs experience in needing to generate large amounts of debt onto their balance sheet, which it believes is not only hard to achieve but negatively affects the end user.
In recent use cases, the company has stated that it has saved businesses over 50% of the expenditure on SaaS subscriptions and reduced churn for vendors.
Philipa Pykett, Head of Digital SME Growth at Shawbrook Bank, remarked: “We’re delighted to be supporting Lemon with its ‘first-of-its-kind’ SaaS financing product. As a specialist lender, we’re able to offer small and medium-sized businesses the type of tailored products and premium service that much larger corporate organisations can expect.
“So, Lemon’s mission of providing these same small businesses with the purchasing power of much larger organisations – benefitting from lower prices and better terms – is something we recognise and are happy to support. We’re excited to be the first financial institution collaborating on this innovation and we look forward to seeing this partnership grow and more businesses benefit.”
