Finance specialist Adrian Wenn from BSK-CiC outlines some of the alternative finance options for new ventures and business growth
Funding your new venture is never easy, but getting it right is critical to the future success of your business. Sadly, obtaining finance from the conventional lenders can often be a stressful experience: multiple meetings, faceless credit committees and a slow time-consuming process.
With the Bank of England reporting that net lending to small and medium-sized enterprises (SMEs) reduced by over £1 billion in the first half of this year, you can be forgiven thinking that it is getting harder to raise cash for your business.
However, times are changing and there is now a multitude of options beyond family, friends, your credit card or the bank manager.
From the ashes of the credit crunch, new ways have emerged to help new and growing businesses find fast, fair and transparent finance. Crowd funding and Peer to Peer lenders provide online marketplaces which allows individuals and organisations such as the Government and local councils to bypass the banks and lend directly to small companies.
Crowd funding is one of the fastest growing sources of funding for businesses providing access to the financial markets which in the past were only available to large PLCs and multi-nationals. Funding is available from £5,000 into the millions.
According to the Peer2Peer Finance Association, £273m was lent in the three months to end-June 2014 and it estimates that £1bn will be lent this year compared to £950m in the previous three years combined.
There has also been significant growth in the number of specialist lenders operating in areas such as single invoice funding, trade finance solutions and property finance. The growth in the number and appetite of these specialist lenders was part of the reason why a record £18.9bn was lent by asset-based lenders in the three months to the end of June.
Banks will always exist in one form or another and will continue to be key providers of funding – but they are no longer a panacea for every financing requirement. Increasingly business owners are realising that there is a wider choice than ever before and they no longer need to have a relationship based on exclusivity with a bank.
To learn more about the many finance options now available, please join Adrian’s free workshop at Kent 2020 Vision Start-Up LIVE on 22nd October at the Kent Event Centre.
Click here for the full seminar schedule and online registration.