Posts

Beat the Big Banks with Alternative Finance

/in /by

Sometimes in life it’s better to go with the ‘alternative’ option. It could be an unconventional route to your dream career or simply a distinct taste in music, but for many of us the alternative seems like the right choice. When it comes to lending, alternative finance options are becoming mainstream thanks to big banks refusing funding to the majority of start-up businesses.

The conventional banking system simply isn’t working for most of us. Without alternative finance providers offering solutions such as peer-to-peer lending, crowdfunding and asset finance, most businesses wouldn’t be here today. These alternative finance specialists are plugging the gap the banks can’t fill, and giving a boost to the economy. Read more →

Why Has Crowdfunding and P2P Lending Become so Popular?

/in /by

Last year in the UK, peer to peer lending reached new heights – lending £3.2bn across 2016, which is up 39% from the year before. Crowdfunding and P2P platforms have been around for over a decade now, and are showing no signs of slowing down. But what has made them so popular, especially with start-ups, small businesses and medium sized enterprises?

There’s a number of factors which have contributed to the boom of alternative finance solutions, such as peer to peer lending and crowdfunding. The uncertain global economic market has definitely played a part, as the recession impacted banks and traditional lenders. Also, consumers and now much more comfortable using the internet to apply for loans and transfer money, which opens up a wealth of opportunity for the financial sector.

Discovering Crowdfunding and P2P Lending?

They are often grouped together but there is a distinct difference between crowdfunding platforms and peer to peer lending. In both cases, it is usually a number of investors who will contribute to the amount you borrow.

P2P is very similar to a business loan from a bank, except that you’re borrowing off real people. You’ll pay back interest to your investors in return for the borrowed finance, and it’s a flexible way for companies to receive a fast cash injection.

Crowdfunding is different because you will receive money from a group of individuals or organisations to make up the amount you require. You will then need to offer your backers some sort of reward – for start-ups this could be a perk such as a discount or free product. Alternatively, if you’re looking for big investors then you may need to offer equity in your business or a profit share – think of Dragon’s Den.

Usually, crowdfunding is a great option for entrepreneurs and start-ups while peer to peer lending is more suited to established businesses.

Why are they so Popular?

These types of alternative finance are now mainstream because it is so difficult to get a traditional business loan from a bank. Lending has decreased for years now, making it impossible for people to get their business ideas off the ground. Without personal investment, entrepreneurs are left with no choice but to pitch their idea online to investors. Even established businesses with a strong trading history can struggle to be accepted for financial help from a bank.

Another reason why peer to peer lending is attractive is the generally low interest rates. If you apply for P2P through a financial broker, they will look at all offers and all interest rates and offer an average interest rate. Larger financial institutions have less competition so don’t offer the best deal.

Ready to see what all the fuss is about? Contact us to find out more about P2P or crowdfunding.

How a Business Loan Could Save Your Business

/in /by

In the current unpredictable economic climate, it’s easy to see why some entrepreneurs and businesses are reluctant to borrow. However, capital could keep the company running in hard times until business improves. More investment is often the answer to improving the business and growing the company. When a business loan is properly costed and you know you won’t be left in long-term debt, it is often a wise move to save your business from failing.

It’s common knowledge that the majority of businesses won’t be eligible for a bank loan. Traditional banks are tightening their lending, however alternative finance providers are helping more and more fledgling businesses. The different types of capital available have helped all sizes of companies in a range of sectors to flourish.

Here’s how a business loan could save your business.

Grasp Opportunities

In business there are many opportunities which sound like a great idea, from buying an adjacent property in order to expand to investing in bulk in order to offer the best prices. Unfortunately, you can rarely take advantage of these opportunities unless you have money in the bank. If you see a business prospect, it won’t be around for long – but a business loan could save the day. Apply through an alternative finance provider and you could have fast cash in as little as a few hours. This type of finance is generally low risk if you know the opportunity will result in a revenue boost.

Asset Purchase

If a company relies on certain equipment or machinery to produce goods or provide a service, it pays to have reliable, market leading gear. When starting up you’ll need a large amount of capital to buy all the equipment needed – which is why you might need a loan. A business loan could also save the day further down the line when an important piece of machinery is faulty and you need to replace it, but don’t have the necessary funds in the cash flow.

Grow and Expand

Why do young businesses fail when they have a strong clientele and a good product? In many cases, it’s because they don’t have the capital needed to scale up. SMEs can’t deliver large orders or hire enough staff to deal with demand when they don’t have the cash. A business loan is often the only way firms can stay competitive, achieve growth and ensure they last longer than a few years.

Find out more about secured and unsecured business loans from our knowledgeable finance experts.

4 Reasons Traditional Business Loans are Dead

/in /by

Over the past decade or so, traditional business lending has faced competition from new and creative alternative finance options. High street banks are clamping down on offering credit, and there are few small businesses which meet the criteria for a traditional bank loan. Yet this hasn’t discouraged entrepreneurs and business owners who require capital to grow their companies. Read more →

The Fastest Way to Grow Your Business

/in /by

If you’re setting your sights on business growth in 2017, then you’ll need an effective plan. With the right planning and research, small businesses can expand rapidly. However it takes a lot of hard work and dedication, and you need a supportive team to grow your business. If your goal this year is expansion, then we’ve got some tricks for fast growth that you’ll want to read. Read more →

How to Prepare Your Business for the Busy Christmas Season

/in /by

Christmas is just a couple of months away, which means that business preparations for the year’s busiest shopping season should be well underway. Many department stores and restaurants have festive decorations and gifts on display from September onwards, but it’s the organisation back of house which is the most important for delivering top customer service at Christmastime. Read more →

Business Loans and Brexit – What Does it All Mean?

/in /by

With the UK’s exit from the European Union scheduled to start next year, the future of the economy is at stake. Brexit will affect every single business in every sector, especially if it trades with EU countries. The pound is already losing value, and international investors are waiting for the market to stabilise before taking the risk. Read more →