Online finance is one of fastest growing and most current ways that small businesses are finding their business funding. It’s based upon a simple premise – that the internet can open up new, independent and alternative options, matching businesses to their best possible form of finance, not just restricting them to the traditional bank loans and overdrafts. This has lead to a diversified lending environment, where peer to peer lending, invoice finance, asset based lending and crowd funding are starting to really grow, offering businesses great options for finding the right finance for their circumstances.
Some of the newest online finance forms include crowd funding, which takes advantage of the reach of the internet to connect investors and businesses from around the world. This allows for smaller investments to find their way into smaller businesses, helping small companies and start ups with funds that the banks might otherwise not be able, or willing, to offer. However, though this funding is growing fast, it’s still not fully regulated and there are risks to investors and businesses should they run into trouble. This is one finance measure for the future, as the internet connects more businesses to the finance that they need.
The internet also allows finance companies to offer a greater range of services, with companies offering new ranges of older products such as invoice finance and peer to business loans through the web. Small businesses stand to gain a lot from the internet finance revolution, as they have expanding options that would otherwise not be available to them through the more traditional channels. The Breedon report showed that a funding gap of £191 billion could open up by 2017 – and internet funding is working hard to fill this gap.