UK policymakers are recognising that more needs to be done for small business funding. With the banks shutting the door on funding for many SMEs, it’s essential that more is done to make borrowing easier to access. With cash flow and late payment problems common amongst the UK small business sector, funding is needed to allow economic recovery to continue.
The government is now looking to expand funding provisions for SMEs beyond the traditional routes to bank finance. From asset based finance and invoice finance to peer to peer lending, microfinance and factoring, there are many options that small businesses can be exploring in the hunt for viable funding.
Policymakers have repeatedly criticised big lenders for freezing out many creditworthy businesses, disallowing them access to funds during the financial crisis. With business confidence now recovering, many SMEs are looking towards growth – but for this they need to find funding.
However, with banks facing new regulations and pressure to rebuild their balance sheets, it seems that bank funding will continue to be hard to access. Regulators want banks to avoid taking risky loans onto their balance sheets – and small businesses are often classed as risky – but at the same time they are under pressure from the government to increase lending to SMEs.
This means that bank funding will continue to be expensive and inaccessible despite a bright economic outlook.
To avoid relying on bank funding initiatives and traditional funding routes, small businesses can look to invoice finance to solve cash flow problems.
Select Factoring offer a range of alternative finance options, including invoice discounting and factoring solutions. These can release funding quickly and securely, with small businesses borrowing against their unpaid invoices. It is possible to release 90% of the value of the invoices immediately, so your business has the funds available for it to grow.