Traditional banks may have a range strengths, but are not always cut out to cater for SMEs. The alternative finance sector is beginning to take an increasing share of SME lending through investing in new financial technology and a dedicated focus on responding to business growth and investment plans. However, there is still a lack of awareness, particularly amongst women.There is a surprising number of female business owners that decide to give up on their investment plans when banks turn them down for finance. Research carried out on SMEs by Just Cash Flow showed that 35 per cent of female business owners simply gave up when their bank initially said “no” without looking at the other options available to them. This was in stark difference with the amount of men – where only 24 per cent stated they had shelved their investment plans when they had been rejected. When asked why, 69 per cent of female business owners said this was because “they weren’t aware of alternative sources of finance” and 95 per cent couldn’t name one local commercial broker that could advise them on how to secure business finance. This lack of awareness was also highlighted in a government report on “Women in Enterprise” last year, which showed that female entrepreneurs often find it difficult to know where to go for support when their business needs investment to grow and that when they are directed, it is to government-sponsored options of which they might not always be eligible to apply for. Read more about alternative finance:
- Alternative finance for 2016: what are your options?
- P2P finance exploded in 2015 as loans from Lending Works grew fourfold
- How UK’s equity crowdfunding success will take tech investments to $8.2bn by 2020
Concerned with issues surrounding gender diversity in business? Don’t miss the Real Business First Women programme: Drawing on years of the First Women movement and the phenomenal network of pioneering women the Awards has created, this programme features The First Women Awards and The First Women Summit – designed to educate, mentor and inspire women in all levels of business. Image: Shutterstock
Share this story