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What is alternative finance, and what is its role in supporting business growth?
Many years ago, after learning of some planned business adjustments an ex colleague confided; “I really don’t like change”.
The truth is: to be successful, we have to continuously change in order to evolve! We simply have to modify and adapt our approach to ensure we remain ahead of the game. To be able to give customers the flexibility and choice they need to support their business needs and growth.
Over 20 years ago, when I began my career in finance, if you were looking to expand your business or raise cash you went to see your Business Banking Manager for a loan. If you were investing in assets, the bank would refer you to their Asset Finance Division to discuss Lease or HP facilities.
As a broker, over the last two decades, I’ve seen our Industry change significantly. I believe the loss of confidence in the major banks during recession to be the root cause. Coupled with a post-recession surge in new Funders and greater availability of competitive lending rates to brokers, this has created a total shift in lending. Customers are now looking for alternatives and the bank is no longer the first port of call for many SME’s.
Just last month, I arranged a cash flow loan for a small manufacturing business in a matter of days. When I asked this client why he’d thought of us, he simply said “Time! I just don’t have time to mess around waiting for the bank!” This client needed cash quickly for a large project and he knew we’d deliver!
Whatever the reasons; research by the Cambridge Centre for Alternative Finance (CCAF): highlighted growth of 43% within the UK’s alternative finance market in 2016. Over the six years to the end of 2016, alternative finance provided a staggering additional £11bn of funding! 72% of this was raised for UK start-ups and SMEs!
There certainly seems to be no signs of slow down; alternative finance is here to stay!
‘Don’t put all your eggs in the bank basket!’ is a message we have been promoting for years. It appears it’s not only our customers who have taken heed!
Business Development Director
PMD Business Finance