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Who Are Alternative Business Finance Suppliers?

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Who Are Alternative Business Finance Suppliers?

Looking back just a few years ago, the primary business finance suppliers were, of course, the banks. However, following a slow uptake on new lending – a result of the 2007 financial crisis – and ever increasing interest rates which have deterred businesses from taking on more ‘traditional’ loans, alternative financing has become more and more popular. According to the Nesta charity, the alternative finance sector in the UK grew by £3.2 billion last year alone, accounting for 12 percent of all lending to small businesses in Britain and Northern Ireland. But just who are these alternative business finance suppliers who are willing to lend to growing businesses at lower rates, and greater flexibility?

There are many different alternative business finance suppliers, and exactly who would be lending to your business really depends upon the type of alternative business loan you choose to take out.

Businesses Just Like Yours
Believe it or not, there are many businesses just like yours that are willing to lend money to other businesses. In fact, the government themselves say you may be ‘surprised’ at just how many are keen to invest in similar and like minded companies. Why? Well, we can’t ignore return on investment, but it’s not just about money, it’s also about supporting the local economy and finding rewards when a company thrives. Peer-to-peer lending is a popular form of loan that offers funding from one business to another.

The Public
Have you ever browsed through a crowdfunding website and donated towards worthwhile projects? Well, it’s no different when it comes to business. Through either donation-based crowdfunding or reward-based crowdfunding, businesses can call upon members of the public to act as alternative business finance suppliers. Donation-based crowdfunding is when the investor does not receive anything for their donation, while reward-based ensures that the investors receives a ‘thank you’ at a later date.

The Local Community
While not applicable to all businesses, some companies may find that they are eligible for a community share scheme, which provides local charitable organisations and societies with shares in your business in return for funding. It is expected that any funding received should help the business to grow and develop in a direction that enables it to figuratively pay back the local community. A community share scheme means that the local community essentially become alternative business finance suppliers in their area.

Alternative Finance Firms
We’re very fortunate that the world of alternative business financing has rocketed, and today there are many alternative business finance suppliers out there willing to lend to growing businesses. Many of these providers will be a part of an established alternative finance firm, who are able to offer a range of different options for businesses including invoice trading (or invoice financing), asset finance, and debt-based securities, for example. These firms may often be able to offer lower rates than the banks.