7th October 2015
Mind the (Funding) Gap
The funding gap for UK SME’s when it comes to alternative finance is unmistakable, but why is this? Over the past year, there has been a fall of £7.9 billion in lending to SME’s, with 38% of small businesses believing that insufficient access to funding is affecting their ability to grow. If this is the case, why is there such a lack of knowledge when it comes to alternative funding?
There could be a number of reasons as to why small businesses are struggling to find the funding that they require, with some arguing that small loans lack incentive, as lending smaller sums of money requires the same amount of work as lending larger sums, but for less return, therefore having a much lower level of incentive for larger lenders.
An interesting (and perhaps a little frustrating) fact, shows that larger businesses are much more aware and open to alternative finance in comparison to smaller SME’s. However, latest figures show alternative funding going from strength to strength with more small businesses turning their backs on traditional funding, so awareness is growing, but we still have a long way to go yet.
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. If you would like to discuss your business options through asset finance and asset refinance, 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 bridge that gap.
There could be a number of reasons as to why small businesses are struggling to find the funding that they require, with some arguing that small loans lack incentive, as lending smaller sums of money requires the same amount of work as lending larger sums, but for less return, therefore having a much lower level of incentive for larger lenders.
An interesting (and perhaps a little frustrating) fact, shows that larger businesses are much more aware and open to alternative finance in comparison to smaller SME’s. However, latest figures show alternative funding going from strength to strength with more small businesses turning their backs on traditional funding, so awareness is growing, but we still have a long way to go yet.
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. If you would like to discuss your business options through asset finance and asset refinance, 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 bridge that gap.