Allica’s SME Land-Grab: Why a Challenger Is Buying Its Way Into Embedded Working Capital
Marcus Ashford
TL;DR: Allica Bank’s acquisition of fintech Kriya marks a major push into embedded SME finance, letting the challenger bank move beyond term loans into real-time cash-flow lending. The deal follows its purchases of AIB’s GB SME portfolio (2021) and Tuscan Capital (2024), creating a full suite across term, bridging, and invoice finance. Kriya’s technology gives Allica access to live trading data for faster underwriting, aiming to deliver £1bn in working-capital finance by 2028. For UK SMEs, it means quicker access to funding, more competition with high-street banks, and a clearer sign that the future of SME lending blends regulated deposits with fintech rails.
LONDON, 22–28 Oct 2025 — Allica Bank has moved decisively to own more of the SME funding journey, striking a deal to acquire Kriya (the fintech formerly known as MarketFinance) and setting a target to deliver £1bn of SME working-capital finance by 2028. The transaction pushes Allica beyond term loans and commercial mortgages into embedded payments and invoice/PayLater—the fast-turn cash-flow rails SMEs increasingly rely on.
It’s the third step in a clear M&A pattern. In 2021, Allica bought AIB’s GB SME lending book, accelerating balance-sheet scale. In 2024, it acquired Tuscan Capital, adding specialist bridging capability. And now Kriya brings transaction-level data, receivables financing and embedded B2B credit—effectively wiring Allica into the day-to-day flow of SME commerce.
Why now? The strategic logic
Own the cash-flow moment. Traditional bank underwriting is built around annual accounts and property collateral. Kriya’s stack—invoice finance and PayLater embedded at the point of sale—lets Allica underwrite against live trading data and disburse in hours, not weeks. That speed is decisive in a market where opportunities are time-boxed.
Distribution through software. Embedded finance turns lenders into infrastructure inside accounting suites, B2B marketplaces and payment flows. That’s a structurally lower-cost way to acquire and serve customers than branch- or broker-led origination.
A credible bid for primacy. By coupling a full UK banking licence and deposits with fintech-grade underwriting and rails, Allica is positioning to be an SME’s primary operating bank, not just its term-loan provider. Its own comms call the Kriya deal a step to “redefine SME lending,” and investor materials highlight a record lending book and growth ambition.
The acquisitions in brief
Kriya (2025) — Adds embedded payments, invoice finance and PayLater; Allica sets a £1bn working-capital ambition by 2028. Terms undisclosed.
Tuscan Capital (2024) — Specialist bridging finance platform, broadening short-duration secured lending. <a href="https://www.bq-magazine.co.uk/" target="_blank">Business Quarter</a>
AIB GB SME portfolio (2021) — A transformational purchase that bulked up Allica’s lending book and customer base early. <a href="https://www.alantra.com/" target="_blank">Alantra</a>
What this means for UK SMEs
Faster access to cash-flow finance. Expect broader availability of selective invoice finance and embedded working-capital lines at the checkout or within accounting tools—with a regulated bank balance sheet behind it. For founders, that can compress decision times from weeks to days (or hours).
More competition for high-street banks. Allica’s move lands as debate over an SME “lending gap” continues, with research (including <a href="https://www.allica.bank/sme-lending-report-2024" target="_blank">Allica-commissioned analysis</a>) arguing that many smaller firms remain under-served by traditional lenders, despite 2025’s partial rebound in bank lending. A scaled challenger pushing hard into data-driven, collateral-light products should intensify price and service competition.
Blurring of “bank” vs “fintech.” A regulated bank buying an embedded-finance fintech is a signal: the future SME lender is both deposit-funded and API-native. For SMEs, that promises joined-up banking (payments, receivables finance, term debt) under one relationship, potentially with fewer duplicative checks and faster credit lines tied to real-time revenue.
Portfolio breadth for the next cycle. With term loans, asset-backed/bridging, and now receivables/payments in one house, Allica can flex credit up and down the risk curve as conditions change—useful if rates fall and demand for growth capex returns.
The open questions
Integration risk. Can Allica fuse Kriya’s tech and distribution without slowing decision speeds or muddying the customer journey? (The bank says Kriya’s brand and leadership—including CEO <a href="https://www.linkedin.com/in/anilstocker/" target="_blank">Anil Stocker</a>—will continue, which should help continuity.)
Economics at scale. Embedded working-capital products are operationally intensive; margins depend on credit selection and collection efficiency. The promised £1bn push will test loss-rate discipline through a full credit cycle.
Market response. Expect counter-moves from other challengers and specialist lenders already active in invoice finance and B2B payments. Whether high-street banks emulate the model—or double down on secured lending—remains to be seen.
Bottom line
Allica’s Kriya deal is less about a headline number and more about owning the rails of SME cash flow. If the integration delivers, UK SMEs could see a credible, bank-backed alternative to high-street inertia: faster decisions, funding embedded where they work, and a lender that understands trading data in real time—not just last year’s accounts.
