The figures from Aviva show that one third of SMEs don’t understand what alternative funding is or how to take it out. The term generally refers to forms of funding launched since the financial crisis that are often online-based, such as P2P loans, invoice trading, crowdfunding and unsecured lending. Almost three quarters of businesses said they considered alternative funding to be more risky than a bank loan, and 40 per cent said they prefer dealing with their high street bank. Half of those who had applied for alternative funding said they did so because it offered greater rates and flexibility than a traditional loan, and 31 per cent said it was easier to get approval for alternative funding. Research by Nesta showed that the alternative funding industry doubled in size to be worth £1bn in the UK last year. Robert Ledger, head of small business at Aviva, said: “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.” Related: 10 alternatives to a bank loan for growing businesses
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.