University of Bath and Dancerace plc KTP 2024_25 R3

A new software tool will assess financial risk in the receivables finance sector—where businesses borrow money against unpaid invoices—to help lenders make faster, more confident lending decisions. Today, many small and medium-sized businesses struggle to access working capital because lenders lack reliable ways to judge the risk of invoice-based loans. The receivables finance market is complex: a single lender may hold thousands of invoices from different debtors, each with its own payment history and default probability. Current risk models are often too slow or too crude to capture this complexity, leading to cautious lending that starves healthy businesses of cash. This project, a collaboration between the University of Bath and Dancerace plc, aims to build industry-first financial risk profiling software that processes invoice-level data in real time. If successful, the tool could boost lender confidence, reduce the cost of credit, and improve access to finance for businesses that rely on invoice financing to manage their cash flow. The impact would be felt in the quiet machinery of the economy: supply chains, small manufacturers, and service companies that depend on steady working capital to operate.