BLOG: 07 OCTOBER 2015
IS IT FINALLY TIME TO BRIDGE THE FUNDING GAP?
Here at Davenham Trade Finance, we think it’s time to bridge the funding gap when it comes to alternative finance. There has been a fall of £7.9 billion in lending to SME’s just in the past year, with 38% of small businesses pinpointing insufficient access to funding as a big contributing factor in affecting their ability to grow. This is a disappointing statistic, highlighting how necessary it is to educate and inform UK SME’s of alternative funding methods if they are to thrive.
Some argue that small loans lack the needed incentive, as lending smaller sums of money means less return for the same amount of work as lending larger sums, which ultimately translates to a much lower level of incentive for larger lenders.
Interestingly, larger UK businesses are much more aware and open to alternative finance in comparison to smaller SME’s – research indicates that 85% of businesses with revenue over £1.1million are aware of alternative finance and a huge 94% would consider using it. So, there is clearly an appetite for alternative finance among the larger SMEs, which is perhaps a little frustrating to know when it is the smaller businesses that need it most. Nevertheless, latest figures do show alternative funding going from strength to strength with more small businesses turning their backs on traditional funding due to issues with the banks, so awareness is growing, but there’s still a long way to go yet, especially when it comes to raising awareness to smaller SME’s.
Ultimately, the key for both traditional and alternative funders is to ensure that catering to a small business’s specific needs should be at the forefront of what they do – something we prioritise here at Davenham Trade Finance, paired with a partnership approach and an ability to look beyond the balance sheet.
If you would like to discuss your business options through trade finance, and feel that it could work for you, please get in touch with a member of our friendly and professional team who would be more than happy to help you gain a deeper understanding of alternative finance and trade finance, and ultimately bridge that gap.
Some argue that small loans lack the needed incentive, as lending smaller sums of money means less return for the same amount of work as lending larger sums, which ultimately translates to a much lower level of incentive for larger lenders.
Interestingly, larger UK businesses are much more aware and open to alternative finance in comparison to smaller SME’s – research indicates that 85% of businesses with revenue over £1.1million are aware of alternative finance and a huge 94% would consider using it. So, there is clearly an appetite for alternative finance among the larger SMEs, which is perhaps a little frustrating to know when it is the smaller businesses that need it most. Nevertheless, latest figures do show alternative funding going from strength to strength with more small businesses turning their backs on traditional funding due to issues with the banks, so awareness is growing, but there’s still a long way to go yet, especially when it comes to raising awareness to smaller SME’s.
Ultimately, the key for both traditional and alternative funders is to ensure that catering to a small business’s specific needs should be at the forefront of what they do – something we prioritise here at Davenham Trade Finance, paired with a partnership approach and an ability to look beyond the balance sheet.
If you would like to discuss your business options through trade finance, and feel that it could work for you, please get in touch with a member of our friendly and professional team who would be more than happy to help you gain a deeper understanding of alternative finance and trade finance, and ultimately bridge that gap.
