Business referrals to peer-to-peer lenders. April industry news
Banks seem to be closing their doors to small and startup businesses, but that shouldn’t deter entrepreneurs from seeking funding. In fact, there are more funding options open to businesses than ever before as new services have emerged to fill the gap. This article discusses the various options including peer-to-peer lending, crowdfunding and angel investing, and suggests businesses looking for finance should take a look at alternativebusinessfunding.co.uk.
Did you lend to powerboat experience company, Saber Powersports last year? This month they featured on the BBC, having taken two Funding Circle loans to fuel their growth. The article quotes speed as the key advantage, with businesses typically accessing the finance they need to grow and expand within two weeks.
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More advice for businesses looking to access finance. This is Money recommends businesses think about turning to peer-to-peer lending due to the flexibility borrowers can have when it comes to borrowing against a business, rather than personal assets.
April saw the largest loan ever listed by a peer-to-peer lending platform. A British urban regeneration scheme landed £8.3m funding from Wellesley & Co. The bridging loan, which is more than twice the size of the previous largest amount raised by a peer-to-peer lender, is backed by a range of 27 properties inside the M25 as collateral. This month we also extended the types of loan we offer to include more small businesses who develop or invest in property.
Banks could be required to refer small businesses to alternative funding providers under proposals being considered by the government. The consultation was announced in the Budget last month and closed on 25th April. We believe that a referral needs to take place much earlier than it currently does. Industry data shows that 50% of businesses exploring finance with their bank do not reach the formal application stage. Signposting to alternatives therefore needs to start much sooner than the formal rejection stage. The Mail on Sunday also covered the story.