Why more SMEs are using alternative sources of finance…

The wide variety of finance options available to SME businesses reflects the diversity of businesses and a need for finance options to meet these specific needs.
99.9% of all businesses in the UK are SME businesses and without them the UK economy would collapse. With this in mind the government, banks and finance companies have agreed that it should be easier for SME businesses to access finance that can enable them to grow and be sustainable.
Additional sources of finance can help businesses grow but at the same time help when things get a little tight.
The main reasons for a business needing finance can include:

  • Late payments
  • Bad debt (No payment received)
  • Drop in sales affecting turnover
  • Increase in costs
  • Change in supplier terms i.e upfront payment required
  • Capital expenditure

The above situations are the most common but not the only reasons a business may require additional funding.
Cash flow and access to finance are cited as two of the top three problems facing the UKs growing SME (Small to medium sized enterprise) businesses.
As cash is such a barrier to growth, it is important that SME business owners are fully aware of the funding options available to the business.
In addition to the high street banks and mainstream lenders, there are many other types of finance available to SME business to enable growth, provide stability, reduce financial risk and allow cash to be taken out of the business for personal use.
If you have applied for finance with your bank but have been turned down, we have written a guide for you to provide you with an overview of the finance options available for SMEs in the UK. This guide will also inform you of why more and more business owners are opting to use finance instead of their hard earned cash!
Whether you are a start-up or an established business our guess is you could always use an additional cash injection. Whether the cash is to purchase new equipment or machinery, cover wages, improve the working environment, pay suppliers ahead of a large project or weather the quiet period that is looming. Cash is the lifeblood of all business.