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Crowdfunding craze hits the profession

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21st May 2014
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Finance providers, businesses and advisers shared their collective wisdom on the rapidly growing crowdfunding market at Accountex last week.

New alternative finance providers were among those exhibiting at the ExCeL London event this year, which also included a special Alternative Finance Options session run by the ACCA.

Delegates at Accountex told AccountingWEB that their businesses and clients were still finding it hard to secure bank finance and that an increasing number were now turning to the growing crowdfunding and peer-to-peer finance movement.

One well-established equity funding platform, Crowdcube, was exhibiting at Accountex and caught up with AccountingWEB at the Press Zone.

In the following video Crowdcube’s Kieran Garvey explains how the company enables investors to invest in early stage and growing businesses in exchange for equity:

“We help our investors invest in a wide range of different businesses in a wide range of different sectors, at different stages." he said. "Last year we grew close to 600% so we’ve seen some phenomenal changes and it’s very exciting space to be in."

Garvey said accountants were central to the growth of Crowdcube because they work with potential investors.

“99% of our businesses are EIS and SEIS compliant, so this is a great tax incentive to encourage investment into early stage businesses,” Garvey added.

Start Up Loans’ creative director and former Apprentice winner Yasmina Siadatan was also at the conference and took part in an Alternative Finance Options panel session organised by the ACCA.

The discussion, which also featured investment writer Andy Davis and Barclays’ Colin Hall, looked at crowdfunding, peer-to-peer loans and invoice auctioning options.

The panel found that increasingly start-ups - whether in the technology, cottage industry manufacturing or business services sectors - were going straight to the alternative funders over the banks. 

Many entrepreneurs and small business owners are younger and using the internet to find potential lenders. As a result, social media like Facebook, Twitter and LinkedIn are playing a big part in the growth of the alternative and crowdfunding markets.

IT finance provider Syscap lured visitors to its stand with a Formula 1 simulator game, but also with its tailored finance solutions and advice. The provider helps businesses acquire the assets and resources they need, without traditional budgetary constraints, allowing them to grow and prosper.

Premium Credit was at the event promoting its payment facilitation and financing services. Its insurance premium finance business provides consumer and business policyholders the ability to pay insurance premia by periodic monthly instalments instead of a single annual payment.

As became evident at Accountex, the alternative market is expanding rapidly and appears to be becoming the norm for a new younger generation of small business owners.

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