Alternative finance demand on the up

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Nick Huber
Freelance journalist
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A growing number of businesses are using alternatives to high street banks to finance deals, research from Deloitte suggests.

As banks continue to be accused of being stingy with lending to businsses, debt transactions from “alternative” lenders such as Ares Management, Alcentra and BlueBay Asset Management more than tripled in the third quarter compared to the first quarter, according to the Deloitte report. 

Companies using alternative lenders include The Trainline, Cath Kidston and Pure Gym, Deloitte said.

Non-bank lenders are becoming increasingly common, participating in 55 UK mid-market debt deals since October 2012. Of the 55 deals, 24 were in the third quarter of this year, more than three times more than the seven deals for the first quarter of this year.

Deloitte reckons...

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03rd Dec 2013 12:41

Are we surprised?

One of my clients wanted to expand his successful business (£200K t/o) - no debts other than mortgage - not even credit card and not behind in payments - so out of interest I visited the local branch of HSBC to find out what the up to date position was re borrowing.

Local manager said she was permitted to authorise a personal bank loan of £25K. If we wanted a business loan she was authorised up to £15K but would need a charge on the main home plus a copy Business Plan.

£15K to £40K needs a Business Plan plus remortgage plus it would have to go to the main office in Southampton for consideration.

Higher than £40K needed the same but to go to London. Oh ... and it all takes 6 - 8 weeks

Client did not want to go through the pain of remortgage so in the end he obtained finance from Bournemouth local council under their new scheme for business but you have to prove that you have been turned down by the bank first.

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11th Feb 2014 20:16

The banks are focused on their own benefits, especially in recent times. Though providing services for consumers and businesses they do it with so much hassle and paperwork, formalities and time consuming, that it's usually easier to get help somewhere else even at higher cost. I often use SterlingStore service, because to get quick help from banks is almost impossible.

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