Alternative Finance SME Funding Platforms Proliferate


Platforms

Today, we bring you a different view of the alternative finance sector. Insider Media blogger, Alastair Logan, points out that banks have largely failed in providing funds to small and medium-sized businesses (SMEs), and that alternative platforms are on the up. Perhaps the most important of these platforms is the Alternative Business Funding hub, of which Money&Co. is a member.

Insider Media Logo

"In the past the traditional overdraft was the funding option of choice for most SMEs. However, Bank of England figures show that the amount of lending to SMEs through their overdrafts has fallen by 40 per cent over the last four years from £20.9bn in April 2011, to £12.5bn in April 2015," writes Mr Logan.

"There has been a similar story with business loans to SMEs from the big banks. The fact is that these institutions, despite what they may say publicly, have been less than keen to lend to small and medium sized enterprises over recent years.

"The government, anxious to kick-start the economy, and well aware that the best way of doing this is to stimulate the SME sector, has introduced a string of measures in recent years to give the banks some encouragement to make more funds available to small and medium sized businesses. These attempts have largely failed, as shown by the Bank of England figures just quoted.

"The reluctance of the big banks to service this market has encouraged other players to fill the vacuum – and many SMEs have eagerly embraced what is referred to as "alternative finance".

"Noticing this, the government has changed tack. Instead of encouraging the big banks they are now starting to throw a little weight behind the providers of alternative finance.

M&CLogo

"One initiative is their recent insistence that when big banks turn down any SME for finance they must offer that company a referral to an approved online finance platform. They must also share the SMEs credit data with such platforms, making it easier for alternative finance providers to offer viable businesses the finance they need.

"Not surprisingly there has been a rush to set up such platforms - Informed Funding, Funding Xchange, Alternative Business Funding, Find SME Finance, to name but a few. Funding Xchange CEO Katrin Herring explains that "as consumers we have benefited hugely from price comparison websites. "We bring the same benefits to a market where shopping around previously consumed a huge amount of time and energy. We have done all the leg-work so it is now easy for businesses to get quotes from a wide range of lenders."

"As an alternative finance provider we're very much in favour of this strategy. We're also delighted that we've been accepted by the British Business Bank as an approved SME lender eligible to register with the new funding platforms."

SBS-logo

*** Are you registered with Money&Co.?

Our registered users can lend to borrowers on this platform. Lenders have on average achieved gross yields of over 8.8 per cent. Selwyn Building Services, the latest loan offering on site, is seeking a three-year loan to accelerate its business development. The company has been through our rigorous credit-analysis process and been awarded a 'B' rating, with a guideline indicative gross yield of 9 per cent. NB Lending carries risk - see warnings on Home, Lend and FAQ pages.

 



FOLLOW MONEY&CO. ON TWITTER

Search news

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More news

2019
AprilMarch
February
January
2018
DecemberNovemberOctoberSeptemberAugust
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
MayMarchFebruary

Search blogs

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More from blogs

2018
2017
2016
NovemberOctoberSeptemberAugustJulyJuneMayMarchFebruaryJanuary
2015
DecemberNovemberSeptemberAugustJulyJuneMayAprilMarchFebruaryJanuary
2014
DecemberNovemberOctoberSeptemberAugustJulyJune



Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.