As with any almost any area of business, getting online is becoming central to business finance. This is especially true when it comes to alternative finance for those businesses looking to get access to funds outside of the big banks. Independent lenders and funding platforms can often offer many businesses funding who otherwise would struggle to get approval from traditional lenders. These online services are growing fast, and are providing an increasingly viable solution to business finance.
The ‘Seeds of Change’ report by the Centre of Financial Innovation highlights the abundance of alternative finance options available for SMEs. These include peer to peer lending platforms as well as invoice finance options, which can boost cash flow for businesses suffering from late payment problems. There are also crowd funding platforms springing up, allowing businesses to appeal to the public for small investments which add up to the full amount needed.
Peer to peer lending allows individual investments into small businesses, helping to match those with the funds to those who need them. Invoice finance unlocks the capital tied up in unpaid customer invoices, helping companies to get hold of funds that they might otherwise be kept waiting around for. Peer to peer lending helps small businesses get hold of the funds they need, and this lending route in particular is becoming more regulated making it a safer way to borrow money.
After the Breedon report of earlier this year, predicting a £59bn funding gap to open up between 2012 and 2016, this new study shows that in fact there are many more routes to funding than just traditional bank loans. The key things for any business looking for funding to remember are to keep an open mind, be prepared to look into alternative finance methods, and, of course, to get online.