Alternative Finance: The Way Forward for SMEs?

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Posted in:berg Advisory, Business Finance, Corporate and Commercial|May 12, 2015 | Join the mailing list

As UK banks pull their purse strings even tighter than ever before, more and more SMEs are starting to rely on alternative finance. In fact, at least 50% of all SMEs currently operating within the UK have confirmed that alternative finance is now opening
up new opportunities in terms of investment and growth. That is the conclusion made by
UK Bond Network and their recent survey into attitudes towards alternative finance channels in Britain.

This figure rises to 74% with the inclusion of companies that have annual revenues over £1.1 million. Overall, the survey has found that alternative finance is providing easier access to funding at a time when major banks are stubbornly refusing to lend.

Current Lack of Awareness

UK Bond Network’s survey has collected data from over 250 SMEs, all based within the UK. The results highlight quite an astonishing shift in awareness and perception of alternative finance outlets between organisations with revenue under £1 million and those
above £1 million. Those businesses that expressed knowledge and awareness of the subject portrayed a positive attitude towards alternative finance and the ways in which it can make a company expand and develop naturally.

However, the results have also highlighted a distinct and concerning lack of awareness of the subject across many businesses in countless industries too. This clearly shows that alternative finance providers need to do a lot more to increase understanding amongst
business owners. Perhaps people are put off by the major barriers put in front of bank lending and give up trying, who knows?

Don’t Dilly-Dally on Development

It has also been reported that 38% of all UK businesses are ‘holding back’ their development and expansion plans due to financial difficulty and inability to access finance through the banks. A massive 63% of these individuals belong to companies with revenues
over £1.1 million. This is potentially dangerous and harmful to job creation in the UK and indeed our economy; as expansion is the number one reason for seeking finance.

In addition to this, companies with turnover less than £1.1 million typically seek finance in order to purchase assets. This is usually a vital action and not an optional one as purchasing assets ensures the continuous operation of a business, not just expansion.
Therefore, this is clear indication that SMEs need access to funding to fuel business growth and ensure they survive, whilst making a positive contribution to the economy.

Join Us and Learn More!

Want to find out more about alternative finance and what it can mean for small businesses in the UK? Come and join us at the

Finance and Society Panel Debate
hosted by Manchester Business School later this month.

To commemorate Berg’s 35-year anniversary, we have teamed up with Manchester Business School to host an exclusive panel debate touching on the subject of alternative finance and what it can mean for your business.

Innovate or Bust – Alternative Finance for SMEs
Venue: MBS (Manchester Business School)
Date: 20/05/2015
Time: 17:45 – 19:45

The effects of the financial collapse are still being experienced throughout the worldwide banking industry, but do we have the option to reposition the industry and the UK’s lending culture? How can we make benefit of alternative lending products such as cooperative
lending and/or crowd funding? Will these actions influence our banks into changing their stance on lending? Will mainstream banking make benefit of this development and create new products of their own?

These are just some of the questions the panel will hope to answer come the 20th of May – so make sure you are there to find out more. The panel includes:

• Ismail Erturk (MBS)
• Alison Loveday (Berg)
• Barry James (CrowdFunding Centre)
• Vernon Hill (Metro Bank)

Amongst other things, the panel will discuss why current models are not fit for purpose, despite changes in legalisation and policy.

Alison Loveday, managing partner at Berg comments: “As sponsors of the event, we are proud to be able to share this platform and debate issues that are critical to the UK’s emergence from the recession.  Unfortunately, an incentivised sales led culture has
often led in the past to unethical lending and it is important that appropriate checks are in place to prevent this.  It is also critical that independent businesses are made aware of the full range of options available to them.”

Don’t miss out – book a place at this fantastic seminar now by sending an e-mail request to

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