Alternative Finance and Funding Platforms

7th Feb 2017

Traditionally a SME business would look to their Bank Manager to help fund all their business’s funding requirements. That relationship has changed with the local Business Bank Manager disappearing for most businesses with sales under £5million per annum.

In their place are automated call centres offering standard products if you fit their internal policies and procedures.

This has lead to the development of many alternative funders looking to fill the gap left by the Banks. The problem is that there are many new lenders all with their own criteria and appetite for lending.

The Government has addressed this by coercing the Banks to refer customers to Online Funding Platforms, which act very much like Moneysupermarket. The theory looks excellent, however if Commercial Finance was as simple as car finance or car insurance then these would solve the problem of finding the right product for time starved business owners.

Commercial finance is not simple.

Where and who does the SME owner turn to for advice in finding a path through this maze?

The answer is widespread and ranges from friends, referrals to accountants.

Independent local Commercial Finance Brokers are usually best placed to advise on the commercial finance market as they have access to a whole range of lenders and play a vital role in ensuring the client sees what funding products are available for them. Effectively they offer a filter and timesaving service alongside many years of experience in the finance sector.

This is a personal service and therefore it makes sense to engage with a firm, which is regulated by the Financial Conduct Authority and a member of the NACFB.

In return the broker earns a commission for successfully securing the independent advice and a bespoke funding package.

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