The alternative finance market is growing spectacularly in the UK. It reached over €4.4 billion (£3.7bn) in 2015, accounting for more than 80% of the European market1. But many small business owners are still not clued up about the range of alternative options available to them. As 2017 begins in earnest the time is ripe to look at smarter ways to grow your business.
Investment can take plenty of planning so it is never too early to start. But with traditional banks hesitant to lend in the current economic climate, securing funding is often a challenge for SMEs.
Traditional loans can mean putting up the things you hold dearest as collateral, or sticking to a rigid monthly payment plan even during unpredictable trading periods. That all-important APR can come back to haunt you if you haven’t taken full account of potential fluctuations over the repayment period. Late and early repayment fees only add to the pain. Before too long that short-term loan intended to grow your business might actually be undermining your financial security and future prospects.
Research shows that half of loan applications from first time SME borrowers are rejected, limiting ambitions to invest and grow the business2. The system clearly doesn’t work for everyone. And that’s where alternative financing comes in.