December 24th, 2014. Ben Lloyd
Are SMEs Missing Out on New Funding Opportunities?
(Image: The Society Pages)
Do you run or work for a small to medium business enterprise? Then you may be missing out on funding.
Forgetting About the Little Guy
New research released by Aviva has revealed that SMEs may be missing out on funding. But why is this? Well, mostly due to owners not knowing about the available options or understanding it.
Aviva’s latest bi-annual SME Pulse of 1,500 UK SMEs found that 36% of SMEs questioned intended to make an investment in the 3rd and 4th quarter of 2014, but were unaware of their options. This means 1.8million UK businesses missed out on mainstream and alternative finance.
33% of these businesses surveyed didn’t understand what alternative finance is or how they could receive it, whereas 29% didn’t know it even existed. Sole traders in particular were uneducated about their financial options with 8 out of 10 not understanding alternative finance or what it is.
There was a decent proportion however, 20% to be exact, that had considered using this form of funding. Sadly though 40% said they have not considered it because they’d prefer to deal with a high street bank, and 70% thought it may be riskier than traditional or familiar options.
The Benefits of Alternative Finance
So why should SMEs search out alternative finance options? Well, 51% of people who answered Aviva’s survey who had previously applied for alternative finance, did so because of better rates or greater flexibility. Whereas 31% said it was easier to secure alternative finance.
So what are the most popular forms of alternative finance?
• Business loans and grants
• Peer-to-peer funding
• Investment funding
• Equity funding
• Money transfers
• Asset based finance
• Family loans or investment
Robert Ledger, head of small business at Aviva, says: “High street banks will always be an important port of call for many SMEs – whether they are at the beginning of setting up a new business, or seeking investment to expand an existing one. However, with the rise of alternative finance options and increasing media focus on schemes such as crowdfunding and peer-to-peer lending, it’s important for small businesses to understand that there are a variety of options open to them outside of traditional finance methods, designed to suit differing business needs.
“The first step is to understand what the finance is for. Decide whether it is to achieve growth or working capital, whether the business has security it can put down and whether the business needs investment and advice. Then look at which option best suits the business needs. If you are unsure the government website www.greatbusiness.gov.uk is a good source of information.”
How Can SMEs be Helped?
Whether you feel there is enough information on alternative finance or not, many businesses are calling on the government to help their business grow. The main objective of this is to cut the red tape surrounding tax and accounting for small businesses, whereas lesser issues such as reducing VAT, reducing corporation tax and ensuring benefits from employment allowances have also been mentioned.
Here at Pure Commercial Finance we can provide you with impartial and independent financial options from both mainstream high street banks and alternative sources. That way you can ensure you get the best deal for you, whoever it is with.
For more information call us between 9am and 5pm on 02920 766 565 and request a call back from one of our specialists.
Article By Ben Lloyd
December 24th, 2014
Ben is the Director and Co-Founder of the Pure Group and Managing Director of Pure Property Finance.
Following a career in Barclays, where Ben was in the real estate finance team for 8 years, he decided that the market needed a more forward-thinking type of commercial brokerage so founded Pure Commercial Finance (now Pure Property Finance), the first company within the Pure Group.
Ben has extensive experience across the real estate sector and has participated in over £2bn of real estate transactions during the course of his career.
Ben oversees the general strategy at Pure Group and works with the senior leadership team to drive the Group forward. Ben is also on the Executive Committee of FIBA.See more articles by Ben