AccountingWEB alternative finance guide 2013

With continued stagnation among traditional high street providers, non-bank lending is more than ever a viable option for small and medium-sized businesses looking to grow.

Despite encouraging signs of an economic upturn with record low interest rates and falling unemployment, bank lending to businesses remains depressed.

This was most apparent in the second quarter of the year when the Bank of England (BoE) said business lending by banks was down £4.5bn.

The government remains optimistic, but its Funding for Lending Scheme (FLS) has had limited success where net lending has been negative for the last two years.

Given this bleak backdrop, a recent Confederation of British Industry (CBI) report has urged small companies to consider a wider range of finance options.

Encouragingly a new wave of innovative non-bank providers has been gathering momentum and is playing an important role in filling the funding gap.

As 2013 draws to a close, crowdfunding, invoice finance and peer-to-peer lending are increasingly commonplace methods for businesses getting access to finance.

Whether it’s new finance for your practice or business, AccountingWEB takes a look at the alternative options that are taking root in the UK...

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  • Asset-based lending
  • Peer-to-peer and crowdfunding
  • Pension-led funding
  • Business angels
  • Other alternatives and trends
  • Conclusion

Continued...

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Comments
Paul Scholes's picture

The way of the past & the future    1 thanks

Paul Scholes | | Permalink

In the days when banks were only associated with the wealthy, and when ethics played a much bigger role, cooperatives and community based support were a significant part of UK society.

Bringing community and personal involvement back into the equation fills the vacuum left by the irresponsible and greed-fed financial industry and, also brings an emotional involvement and enjoyment that's been missing for so long, ie when you look to invest, or seek investors, through crowdfunding, you are hoping to connect with like minded organisations and people and, as an investor, in both commercial and voluntary sectors you can put your money where your mouth is, cutting out the unnecessary middlemen (and most do tend to be male).

In addition to those mentioned above have a look at Crowdfunders.co.uk (especially at their offering from Sutton Community Farm - sorry close to my heart) and Bank to the future which has had huge media interest and offers equity & loan funding.

Finally, if, when you give to charity to help a developing world country or region and wonder what really happens to your money, give some thought to micro-lending directly to the local businesses, at 0% interest at Lendingwithcare.org - think of it as recycling your donations.

EDIT: Kingston Smith have a great summary of the tax aspects of CF