Can SMEs benefit from alternative funding sources?
The majority of mid-sized firms believe that alternative finance sources could help them to raise capital, a survey from the UK Bond Network has revealed.
Some 68% of these firms believe it could help their situation while 50% of companies believe it could create new opportunities for business.
Businesses with larger annual turnovers than £1.1 million were found to have a greater appetite for alternative finance, as 94% of them would consider using such a route.
Awareness of alternative funding options was also higher among these firms as 85% of them knew what approaches they could take.
That compares with just 58% of companies below the £1.1m threshold that understand their funding options.
Peer-to-peer finances broke through the £1 billion barrier for the first time in 2014 and this alternative finance space is viewed as increasingly important in the current business climate.
Many smaller firms already have a wide array of options as smaller transactions can be easily processed while mid-sized firms are lagging behind.
It means plenty of opportunities exist for funding for many companies, especially as alternative finance has become more mainstream.
Such options can provide businesses in need of finance with a faster solution to those that are available with traditional finance providers such as banks.
The decision making process for business funding can often take some time to conclude, so other means can help businesses to get ahead of their competition.
Such financial approaches also tend to be highly flexible and relatively simple to access, making them appear popular in the eyes of businesses.
Careful management of business finances at any level is required to ensure that operations go smoothly – especially in the early days of a company when money is often not readily available.
Streamlining business processing can also help to cut unnecessary spending and any firms with financial concerns are advised to contact insolvency practitioners for advice.
This should provide at least one set of options should a company’s financial situation make the continuation of trading a difficult process.
By Phil Smith