Alternative Finance Sector Is a Lifeline For UK SME’s

Alternative Finance Sector Is a Lifeline For UK SME’s image

The alternative finance sector has become a lifeline over the last five years helping hundreds of businesses who were turned away from the high street banks. The legacy from the high street banks opened up various new products all being classed as alternative finance. These include invoice finance, challenger bank loans, peer-to-peer lending and advance loans. If you run a small business and have credit and debit card sales you may easily qualify for an unsecured business cash advance. This is growing month on month in the UK and is becoming more mainstream rather than classed as alternative business finance. A business cash advance is still fairly new in the UK however only really taking shape over the last five years.

Any business that takes card sales via their merchant credit card machines (PDQ merchant terminal) can qualify for up to 140% of their monthly card takings. The great part about this type of borrowing is that it is unsecured and works in line with your business cashflow. In other words if your business has a poorer month on sales then you will pay back a less amount – in line with your cashflow. And, on the other hand if your business has a good month then the loan is paid back quicker.

Short Term Business Loans in the UK has taken off online especially in the alternative business finance space. The year on year growth fuelled by high street banks seemingly reducing the amount of business funding available makes it an attractive proposition to anyone.

There are many new companies that offer Merchant Loan Advance style lending that are now finding the funding they need to grow. There are many sectors which benefit from such a loan type. Any business that takes card payments – mainly customer facing. Take for example the hospitality sector. There are many business types that qualify such as pubs and restaurants, these are one of the main categories that this type of funding is ideal for.

Also are the likes of hotels, bed and breakfasts, beauty salons, dentists, MOT Car Centres, florists, butchers are all the perfect style business to qualify for this type of finance.

With UK recently voting to leave the EU via Brexit it was reported that we may see a downturn in trade. In fact the opposite has happened with the British consumer spending even more on the high street and online with figures in Retail hitting an all time high. Maybe it could still be short-lived but the industry is looking positive to say the least. Businesses are requiring unsecured funding, consumers are spending, unemployment is lowering, the UK economy is strong with economic forecasts and international trade deals there for all to see.

So what should businesses do in this time of positivity? Well the simple answer is don’t stand still. Push marketing especially online where there is an explosion of opportunity waiting for any business ready to embrace new social media channels such as Periscope, Snapchat and Instagram live to name some of the latest ways to broadcast your business wares without the need to allocate marketing budget.

So what are you waiting for? If you’re not embracing new channels you may want to investigate how they can help your business today. You will see an upsurge in awareness of your brand in literally hours.

“We took out a business cash advance for our business at the beginning of 2015. It was a small loan amount of £12,000 but enabled us to refurbish the restaurant and invest into localised marketing. We also built a website and built a solid customer database from the marketing spend which enables us to re-engage with our customers via email and SMS marketing. If we have some spare tables on a Tuesday evening, a simple SMS out to our existing customers with an offer or promotion and the phone rings with bookings. It really is that powerful.”

“We used a merchant loan advance for our practice. We needed to buy in a new dental chair for an extension to the practice along with an online booking system. The money was funded within a couple of days and we found it so much easier than our meetings with our local bank who have now moved to a different town may I add!”

Circa 1.2 million people invested, donated or borrowed via online alternative finance platforms in the UK.


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