SMEs turn to alternative finance options
A growing number of the UK’s small businesses are turning to alternative finance options to support growth, new research has revealed.
According to Worldpay, 52% of small businesses have voiced concerns that traditional routes to finances may not be as readily available in 2018 as they have been in the past.
Three in ten businesses have also said they have faced difficulties securing funding via these traditional channels, such as via bank loans,
Some 40% of businesses meanwhile claim that using alternative finance options has meant they are less reliant on banks when they require funding to support growth plans.
These forms of finance are currently just as popular as bank lending for start-up business owners and smaller firms.
While 21% of entrepreneurs and business owners aged under 44 said they would use a bank loan as they predominate source of funding, 17% said they would consider crowdfunding and 11% peer to peer lending.
These alternative finance options can be used for a range of reasons, from overcoming short term cash flow issues to supporting growth or boosting working capital.
Small firms have also voiced concern over the current political and economic state of the UK, with uncertainty surrounding Brexit a major source of anxiety.
Less than half of businesses expect the situation to improve on the coming 12 months, while less than a third of those in London are optimistic about what 2018 may bring.
Growth plans remain in place for the majority of firms though, as owners still want to expand their businesses, even against a backdrop of uncertainty.
Small businesses need to carefully assess their options when it comes to finding a suitable funding route for their circumstances.
Recognising that there are a range of alternative finance options available is one of the first steps, and the support can be of valuable importance in times of need.
By Phil Smith