Small businesses need to start looking to alternative finance providers to get the funding they need according to many experts. Invoice finance is rightly one of the big players on the alternative lending market and is set to help many businesses as it becomes more and more mainstream – and indeed, it’s already growing. This diversifying of the UK lending environment is exactly what the UK needs.
Recent figures from the Bank of England have shown that lending by the major UK banks fell by £4 billion in the first quarter of 2012, the biggest single year drop since 2010. The Federation of Small Businesses has also revealed that 41% of firms have been turned down for bank loans during the second half of last year. It is clear that many businesses are being precluded from finding the finance they need from traditional lenders – finance that is essential if businesses are to grow, develop and contribute to wider economic growth.
The UK economy now appears to be on track for proper recovery, but a lack in SME lending will only seek to slow this down. One of the big problems highlighted by experts has been the lack of lending diversity within the UK, which compares unfavourably with many EU rivals. If the recession has taught us anything, it’s the importance of having a diverse range of business finance solutions to choose from – and that we can’t always rely upon the banks to see us through thick and thin.
Small business lending is a huge market and makes up a large section of the UK economy. Lending such as invoice finance addresses issues such as cash flow, working capital requirement and late payment so it can be a flexible and accessible solution for many businesses. It’s one of the most prominent alternative lending options that is now diversifying the UK lending environment.