According to turnaround expert Mike Smith from Jamieson Smith & Co the alternative finance market has stepped in to fill gaps left by banks. In this overview of providers, he suggests that may not be such a bad thing.
Whether you want simple banking facilities or to raise funds from invoices, securing finance is changing. Who are driving these changes and which areas are they best suited for?
Recent FSB research found many business owners are now younger and better educated than previous generations. This group is starting to affect on the way finance is raised for small to medium sized businesses.
Without the same allegiances to traditional banking and sources of finance, they are using the internet to find potential lenders.
Recent research revealed that 73% of the clients of Funding Circle, the largest alternative lenders, would not go back to using a bank even when offered the same facilities. Moreover, the government is circulating a consultation paper examining the possibility that banks may be forced to recommend alternative lending options.
As an accountant it is important for you to know why this is happening. The FSB research highlighted that accountants are still seen as the key source of business advice when considering company finances.
Register for free with AccountingWEB and log in to see the full article, which discusses some of the main options, and where they might fit with a business’s needs. The options include:
- Alternative invoice finance
- Alternative lenders (Crowd funding/Peer to peer lending)
- What about the banks?
Mike Smith is director of Jameson Smith & Co a business debt specialist. Mike provides business turnaround and insolvency advice and solutions to UK company directors and accountants.