Many experts believe that in light of the bank’s continued failure to serve the interests of the country’s SMEs means that small businesses need to start looking to alternative finance providers to get the funding they need. For some, crowdfunding is set to steal a big chunk of the small business lending market, while others believe that invoice finance is rightly set to take a big part of the alternative lending market – and indeed, it’s already growing. This is what the UK economy needs – a diversifying of the lending environment.
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. This is the biggest drop in a single year 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. Evidently, many businesses are being shut off from the finance that any business desperately needs in order to grow and develop.
Now that the country is finally finding its way out of the recession more strongly, it’s possible to look back on the causes and try to address them. One of the big problems that experts have highlighted is that lack of diversity in the UK business lending environment. If the many tough economic years have taught us anything, it’s that businesses need more variety – crowd funding and invoice finance could help to provide some sort of answer.
Small businesses make up a huge section of the UK economy, so it’s essential to address the many problems with finance and lending that small businesses encounter. There needs to be a lending system which allows SMEs to get access to the finance they require without having to rely on the banks. Invoice finance is one such option, offering flexible and accessible finance that can grow with your business. It’s one of the most prominent alternative lending options that’s now diversifying the UK lending environment.