Alternative Funding - A Guide for UK Business

Peer-to-business Loans

It's complicated! Well, obtaining funding for your business from somewhere else other than the major banks, can be. This guide summarises the major alternative funding sources currently on offer to UK SMEs, with contact details for leading providers in each category. View the YesGrowth Alternative Funding Guide here 

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5 Tips for Invoice Finance

Invoice Funding

Invoice finance and factoring are reliable solutions for obtaining funds for a developing business. However, one needs to understand the market before taking up any of these financing options, as there are several other options of funding available. Listed below are 5 tips that will help you in making informed decisions:

1. Save money on borrowing costs As a business owner you should only draw down funds that are required from the financier, as funds borrowed will attract an interest payment for the amount of time such funds are outstanding. 2. Confidential financing - factoring The choice of method depends on the finance team that a business has employed. In the event that there is a...

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Just Cash Flow PLC Launches Borrower Facing App

Direct Business Lenders
Sponsored Article

Small business lending platform Just Cash Flow PLC is claiming to have become the first European alternative lender to launch a mobile app that allows customers to manage their money on the move.

The app will allow small business owners to manage their Just Cash Flow funding facilities from wherever they are, at the touch of a button. The app will allow borrowers to check up on their account balances, to securely draw funds, to make repayments, to check transaction history and to contact the platform's customer services team.

Just Cash Flow is clearly making a conscious effort to enhance the accessibility of the platform. In Novemb...

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An Introduction to Merchant Cash Advance

Revenue-based Loans

Most small business owners would love to have additional capital to grow their company, such as expanding their space, purchasing new equipment, hiring additional employees or simply having cash on-hand for random expenses. What some small business owners may not realize is that instead of applying for a small business loan, a merchant cash advance may be better suited for their industry. Here are five things you need to know about merchant cash advances so that your small business can get the financing it needs to grow!

1. The payment schedule – Unlike small business loans, the payments for a merchant cash advance won’t be the same every day. Instead, they wi...

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5 Steps to a Successful Crowdfunding Campaign

Equity Funding

Deciding to embark on an equity crowdfunding round is a big decision for any founder. A successful campaign requires a lot of planning before launch and an equal amount of work during the raise.

Before founders submit a campaign they should ensure that these five elements are well prepared to maximise their chances of success.

1)Know what you want

Before promoting a crowdfunding campaign, it is essential that founders are confident with what it is they are offering and willing to give in exchange for investment. The valuation of the business is one of the most crucial decisions a founder must make, as it will greatly impact the s...

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Business Funding for Dummies

Written by our very own SME advisor, Helene Panzarino.

Funding is one of the biggest pain points for small- and medium-sized businesses and one that comes up on a daily basis. Whether you're unsure about how to get a loan, bewildered by equity, unfamiliar with the different options available to you, or confused as to which would be the right solution for your particular business, Business Funding For Dummies provides plain-English, down-to-earth guidance on everything you need to successfully fund your business venture.

Friendly and authoritative with a dash of humor thrown in for fun, this hands-on guide takes the fear out of funding and walks you step-by-step through the process o...

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A New Finance Innovation Lab to Open in London.

Financial innovators with a social or environmental mission can now apply to participate in a groundbreaking incubation programme announced today by the Finance Innovation Lab. The six-month Fellowship scheme combines business strategy workshops, peer coaching and leadership development, and is free of charge to start-ups.

Applications are invited from innovators who are actively developing a financial product or service that responds to a real need in society and has the potential to transform the wider financial system. Fellows are not required to be working on their idea full-time, but must have shown commitment to developing th...

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Zopa' 2015 - A year In Review.

Peer-to-business Loans

2015 was a record-breaking year for Zopa. We won awards, broke UK peer-to-peer lending records and explored new ways for peer-to-peer lending to reach more consumers.

Here are some of our 2015 highlights, or take a look at our 2015 infographic:

Breaking UK peer-to-peer records

This year Zopa has smashed through a number of UK peer-to-peer lending milestones.

The big one, which was covered widely in the media, came in August when we became the first UK peer-to-peer platform to lend its billionth pound. You can delve into the figures behind Zopa’s first billion in our infographic.

We also set monthly records for UK P2P lending. In July we became the first platform to lend £5...

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'You can trust me, I'm not a banker': Peer-to-peer lenders are part of the Establishment - as the OBE for Zopa co-founder Giles Andrews proves

Peer-to-business Loans

Once upon a time the New Year honours saw a slew of bankers collecting gongs. These days things are different – in 2016 it is the so-called ‘alternative financiers’ who seem to have been the winners.

Among them is Giles Andrews (now OBE), co-founder and executive chairman of Zopa. The pioneering group has overseen £1.2billion worth of lending to individuals an...

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Is Basel III responsible for holding back SME growth?

The Basel III accords set out a far stricter regulatory capital framework for banks, to increase the resilience of the global financial system after the unprecedented events of the 2008 credit crunch. At the time Basel III was debated, a number of technical commenters expressed concerns that it could overcorrect the mistakes of its discredited predecessor Basel II, in particular by being punitive on lending to small firms – which are often described as the engine room of economic growth.

Now, a few years on from Basel III, in our white paper “Small business finance: Life after the overdraft”, we have carried out a UK surv...

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5 Steps to a Successful Crowdfunding Campaign

Equity Funding

Deciding to embark on an equity crowdfunding round is a big decision for any founder. A successful campaign requires a lot of planning before launch and an equal amount of work during the raise.

Before founders submit a campaign they should ensure that these five elements are well prepared to maximise their chances of success.

1)Know what you want

Before promoting a crowdfunding campaign, it is essential that founders are confident with what it is they are offering and willing to give in exchange for investment. The valuation of the business is one of the most crucial decisions a founder must make, as it will greatly impact the succe...

Read more »

Trade Finance is the new funder on the block

Trade Finance

Trade finance is an umbrella term for the short-term financing of goods and services which are traded around the world, and includes a range of products such as Letters of Credit, Documentary Collections and import/export loans. Traditionally a form of finance that has been heavily reliant on bank and institutional funding, trade finance is now beginning to emerge within the alternative finance sector. Trade finance uses the goods or materials being shipped as the ’security’ backing a deal, rather than assets that the business or directors own.

We've made some forecasts and predictions for where we see the trade finance ...

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Borrowers Turn to P2P to Solve Debt Problems

Over a quarter of peer-to-peer borrowers were oblivious to how much interest they were paying on their debt before taking out a P2P loan.

Research conducted by peer-to-peer lender Lending Works shows that more customers are taking out P2P loans to manage their existing debts due to cheaper rates and the transparency of the loan.

The report suggests that 27% of borrowers were unaware of how much interest they were paying on their previous debt of which over a fifth (21%) were paying between 15% and 20% in interest, while 13% were paying more than 25% interest.

The research also revealed that over a quarter (28%) of all Lending Wo...

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BBB to Lend to SMEs Through RateSetter

Peer-to-business Loans

The British Business Bank (BBB) is buying into RateSetter’s rapidly scaling SME lending programme.

The BBB first began pumping money through the RateSetter platform in July 2014, with the express purpose of providing funding to sole traders. £10m was then to be put to work, which would comprise 40% of any qualifying loan until £4m of the money was used up, after which point the remaining funds would make up 20% of all qualifying loans.

What classes as “qualifying” now includes SME loans. RateSetter recently revealed that a whopping 40% of its outstanding loans belong to businesses of some description. That’s £180m of RateSetter money that has...

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Education, Education, Education

We probably sound like a broken record going on about how important education is for the alternative finance industry but a new study has shown how oblivious a lot of people are about the sector.

When I say ‘people’ I mean financial industry experts. We bang on about the importance of business owners knowing about the sector but it is probably even more essential for financial advisers to know the ins and outs of the alternative finance.

However, new findings by Intelligent Partnership show how little financial advisors know about the space. According to the study only 7% of advisors realised that the FCA regulates the alternative finance space, while only 13% knew that s...

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Late Payment Continues to be an Issue for SMEs

Late payment is still a huge problem for small to medium sized business in the UK.

This topic was widely talked about earlier in the year with the government announcing that it was to get tough on late payments to SMEs by introducing a Small Business Commissioner.

Business Secretary Sajid Javid also revealed back in May that he would be introducing a new small business conciliation service to help tackle late payments.

However, it is clear from a new study conducted by Tungsten that some SMEs still have to wait longer than the expected 90 day period to be paid. The report shows that 12% of the UK’s 5.2 million SMEs are ...

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The Evolution of Cross-border Trade

Trade Finance

We all rely to some degree on cross-border trade – whether it is for the digital devices we all have in our pockets or the clothes we wear, the cars we drive or the food we eat.

The volume is huge, twice the value of all the USD in circulation in 2014 alone. But the techniques for the financing of this trade haven’t changed much over 150 years. The challenge is as old as trade itself: how to fund the gap between acquiring the goods overseas and getting paid for them by the end customer at home.

Dany Rastelli, Head of Public Affairs and Marketing says:

“To this day, most cross-border finance is done by banks, using techniques that are almost Byzantine by ...

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FLS Paying Off, P2P Continues Growth

The Funding for Lending Scheme (FLS) is churning out consistently positive results.

We’ve been tracking the FLS for some time, with a particular interest in comparing the impact of its participants’ small business lending with the impact of the many peer-to-peer business lenders. The 2014 numbers made for depressing reading, with net lending to SMEs under the FLS falling quarter by quarter, amounting to a net decline of approximately £2 billion. Peer-to-peer lenders went some way towards plugging that gap – facilitating a total £967m in SME lending in 2014 – but could not hope to close it up completely.

It’s worth offering the up-front caveat that we only p...

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New UK Invoice Platform Emerges

Invoice Funding

A new online invoice finance solution has appeared on the UK’s alternative finance scene. Companies struggling with cash flows, while waiting for invoices to be paid, now have a new option by the name of Funding Invoice.

Founded by Aamar Aslam, a recent Warwick economics graduate, the recently launched platform matches small businesses with a network of potential investors, who can purchase invoices and provide up to 90 per cent of their value immediately. The rest of the money will be provided only when invoices have been paid and investors are charged a small fee whenever that happens. The platform is keen on highlighting that only investors are charged, while SMEs are not.

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Business Confidence Set to Nose-dive

Invoice Funding

Business confidence is expected to plummet to its lowest level since the beginning of 2014 according to new findings.

The Bibby Financial Services’ latest SME Confidence Tracker suggests that business owners are taking a cautious approach to capital expenditure, hiring and business growth.

The report shows that less than half (46%) of SMEs expect their business to grow, down from 64% in Q1 2014, when the survey began.

David Postings, Global Chief Executive of Bibby Financial Services, said:

“UK SMEs are sensing dark clouds on the economic horizon, which is translating into dampened expectations for growth in the final months of 2015.”

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