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Accountants-advantage through technology; opportunity in a changing space

21st Apr 2016
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The way small and medium sized business owners go about securing business funding is changing, and will continue to change at a rapid pace as more and more new entrants enter the specialist product space.

To some this would already seem like an overcrowded market with well over a hundred non-bank funders offering a bewildering array of specialist and generalist solutions, with pricing varying from exceptionally keen to eye wateringly expensive. Time will tell which of these have real market appeal and which are just opportunistic efforts to exploit a perceived imbalance in supply and demand.

On the face of it this explosion in funding solutions would seem to be good news for the broker community since more choice should mean better outcomes for clients.  A quick look at how many brokers operate, however, would lead one to question that assumption, since the majority of brokers are specialists themselves, and often have strong relationships with no more than four or five funders. Enquiries that fall outside of their specialisation are usually referred to a different broker or simply rejected. At the heart of this is the simple fact that no one can claim to be fully and satisfactorily conversant with over a hundred different SME funding products, and certainly most intermediaries do not have the time to genuinely research and advise on such a large range of options.

Therefore most advisers, brokers and accountants will have to rely on technology to help them direct clients towards appropriate and relevant funders, which immediately has the effect of levelling the playing field between the two disciplines when it comes to providing guidance in this space. The technologies employed in aggregator and resource sites such as Alternative Business Funding (ABF) are real democratisers, being free to use and, crucially, completely unbiased, meaning the outcome will be the same no matter who is inputting the client details, be it accountant, broker or business owner.

There is therefore an immediate opportunity for accountancy practices that are active in the small and owner managed business sector to broaden their advice offering, with confidence and at no direct cost, since the use of an aggregated funding finder will allow them to immediately compare dozens of offerings and narrow these down to the few most appropriate. They can then introduce the client to the funder with an excellent compliance paper trail and a guarantee of impartiality. Such resource would be costly if it were attempted in house, however ABF and a few of its counterparts are free to use for advisers and business owners.

Since we all understand that trust is at the very heart of an accountant’s relationship with business clients we can easily see that the rise in non-bank funders, together with the arrival of the technology to safely navigate this space puts practices who do wish to broaden their offering at an advantage. The communication channels are already open and advisory credentials established, and the tools to exploit and meet the demand are now freely available for practices to adopt and use.

In a SME funding market that is becoming increasingly disintermediated (certainly the distribution model adopted by the latest generation of alternative finance providers) the need for quality advice based on sound research tools that provide unbiased outcomes looks very much like a significant business opportunity with no implementation costs. What’s not to like?

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