Marketing No Comments

Significant Rise in UK SMEs Borrowing Money Expected in 2023

The majority of UK SMEs (88%) plan to lean on business finance and credit this year according to new research carried out by solution-led fintech provider Nucleus Commercial Finance (NCF).

As the economic situation continues to challenge the outlook and stability of UK SMEs, it is revealed that only 12% of SMEs say they have no plans to borrow any money over the next 12 months – this rises to 29% when including sole traders and micro businesses. With interest rates still at record high levels, this is going to place a real financial burden on UK businesses.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

The expected borrowing is not, however, solely to patch holes. The reason most commonly cited by small and medium sized businesses is to enable them to seize growth opportunities (38%). More than a third stated that they plan to borrow in order to help employees with the rising cost of living (34%). A similar number said that borrowing would be driven by a determination to use it to make the business more environmentally sustainable.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Rising costs and financial stress are still having an impact, however. A third (33%) of small and medium sized businesses expect to use business finance to cover unavoidable rising overheads, while one in five (20%) are likely to do so in order to pay off existing debt.

Source: Fintech Finance News

Marketing No Comments

5 Tips To Make Your Business Stand Out In A Crowd Of Competitors

Separating your business from the pack is key to success in any industry. How do you make sure your business stands out from the rest? Superb service and product quality are critical, but how your business is marketed and perceived will also decide your success and growth. With that in mind, let’s look at our five tips for helping your business stand out in a crowd of competitors.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

Tip 1: Establish Your Selling Point
What actually makes your business special? Why should a consumer choose you over a competitor?

Having an answer to these questions will determine your business’ selling point and is the steppingstone towards proving your ‘why’ to consumers. Establishing this early on is paramount or your confidence as a business owner will be lacklustre.

After your selling point is cemented the next challenge smaller businesses often face is gathering the team to support these operations. This can be mitigated through virtual office providers such as Servcorp which offer businesses a fully trained support team. As a small business, having your own receptionist, secretarial assistance and I.T support without needing to undergo the hiring and training process is a large cost plus time saver – after all, your time is money.

Businesses also receive this staff support at the fraction of the cost they would otherwise be paying.

Tip 2: Present a professional working environment

Many businesses find it challenging to create a professional working environment to impress their clients, especially for newer companies competing in major global markets on a limited budget. Traditional office spaces require long and costly leases, with break-out clauses only every few years, if at all.

A more convenient and cost-effective solution is a serviced office. These can be rented at a far less cost than a traditional office, whilst still being located in major business hubs like London and New York. Moreover, customers will enter an unbranded reception area allowing businesses to imply that they control the entire floor.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Tip 3: It’s all about Marketing
Your product may be superior to competitors, but it will all be meaningless without adroit messaging and unique marketing. Your business is likely to have thousands of competitors, which is why the first step is to complete a competition analysis.

Comprehensively understanding what your competitors do well, recognising trends and identifying where others are failing will provide your business the strategic insight needed. From this your business will have a decisive direction on its marketing goals, however finding new methods to secure a commercial advantage will accelerate your point of difference.

For example, using a virtual office can provide an established look for smaller businesses based in the UK. With a virtual office your company can legally register its business address as the virtual office’s address.

Tip 4: Always provide excellent customer service
Customers expect and deserve excellent service when dealing with you. Make sure you have processes to deliver the highest quality customer service and ensure that all your staff are trained to meet these expectations.

Whether it’s the front desk staff, your Customer Service team, or a manager calling back, providing the best care for your client will help retain them over the long term. Even an unhappy customer can be won back if the service they receive after a problem is effective and genuine.

Tip 5: Network!
Get discovered by networking. There are many ways to find networking opportunities. Meetup groups, seminars, conferences, and industry events are great ways to meet like-minded people. This an opportunity to make business partners and scope out your competition at the same time.

And don’t forget the power of social media – there’s an app for almost anything these days!

By creating meaningful relationships in your industry, you can leverage audiences and gain exposure for your business. It’s also worth noting that all Servcorp’s serviced and virtual office customers gain access to Servcorp’s online networking community of 50,000+ global businesses and networking events, providing them with a significant additional value from their small investment.

Source: Real Business

Marketing No Comments

Keeping it in the family? SMEs divided on working with relatives

SME owners are split on whether to keep their businesses as a family affair or not, according to new research by small business lender iwoca. Just two in five (41%) SME owners say they would give a job to a family member if they asked – by contrast, nearly one in three (30%) said they would not employ a relative.

This split reflects current small business arrangements – just over half (54%) of small business owners say they do not work with family in any capacity. Of those who do work with family, one in four (26%) small business owners works with their partner and one in twelve (8%) works with their child.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

Steptoe and Son or Succession?

Those who choose not to work with family are clear on why: two in five (39%) small business owners report wanting to keep family and business life separate. One in ten (11%) say they want their family to forge their own path – indeed, more than a third (35%) of SME owners surveyed say it is unlikely that their children would join their business. Interestingly, a tenth (10%) believe their relatives can find a better career outside of their industry.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Improving family bonds

Despite a minority of SME owners employing relatives, those who do work with family members see it as a positive. Almost two thirds (64%) of SMEs report that working with their relatives had a positive impact upon their relationships, with only a small fraction (7%) of SME owners reporting a negative impact.

Those small business owners who do work with their family cite trust as a significant positive, with a quarter (25%) saying that they trust family members to do a better job than a stranger.

Seema Desai, COO at iwoca added: “For some, working with family members could be one of the best decisions they ever make, but, of course, it won’t work for all. Try to make an objective assessment about what your family member can add that is currently lacking in your business, and whether you could both maintain the right guardrails to protect both your professional relationship and your personal one. Clear roles and responsibilities will be crucial as you look to grow and build a successful venture in the future together.”

Lottie Whyte is co-founder and CEO of MyoMaster, which she set up with her husband, Joe. She says: “I co-founded a business with my husband Joe three years ago, and for the most part it works incredibly well. There are three key reasons for this, the first is commitment – the work is all consuming and if I’d been married to someone who wasn’t in the business with me I’m pretty sure I’d be divorced by now! The second, trust, is vital and it’s great being able to start with a foundation already so strong. And finally, speed – being able to skip the pleasantries and communicate efficiently has been crucial.

“There can be drawbacks of course, from never being able to switch off from work and the constant pressure to build our global business can sometimes spill over into our personal relationship in a negative way. But overall, my husband and I already have a long history of working well together, from organising our three day wedding to managing house renovations – we know how the other one works.”

Marketing No Comments

How to make your budget stretch further as a startup

So, you’ve just launched your business and are optimistic about its prospects. You’ve got a great product, a passionate team, and some solid early traction. But there’s one problem: you’re low on cash.

Stretching your budget is going to be essential if you want to keep moving forward. Here, we’ve outlined some of the cost-saving measures that can help fledgling business owners get their venture off to a flying start.

Reduce your SaaS spend
One area where many startups unknowingly overspend is on cloud-based software, or software as a service (SaaS). While SaaS products can be excellent tools for boosting productivity and efficiency, they can also be expensive.

A report by SaaS purchasing platform Vertice found that 90% of buyers pay more than they need on software, wasting money on redundant applications, excess licenses and overpriced contracts.

However, there are some ways that you can optimise your SaaS spend without compromising on quality or functionality. For example, many tools offer a variety of features, but you may not need all of them. If you know exactly which features you need and which you do not, you may be able to negotiate a better contract by only paying for those you need.

Furthermore, some providers offer flexible pricing models that allow you to scale your subscription up or down according to your needs. This can be a great way to save money if you only require the software for a short period of time or if your business is seasonal.

Utilise your startup status
According to Harvard Business Review, startups have an untapped power often admired by investors, business founders, and customers alike. Motivated by the challenge of helping to create something new and successful, many vendors and consumers are drawn to support small businesses.

Ondeck explains that startups also often have more leverage than they realise when dealing with suppliers: “Many vendors offer simple win-win ways to make your relationships more profitable for you — and for them.” Remember, they want your business just as much as you want theirs — so don’t be afraid to ask for discounts or extended payment terms.

Furthermore, if your startup has been trading for less than 36 months, it may be eligible for a government-backed startup loan, as well as up to 12 months of mentoring. Alternatively, depending on your industry, some commercial properties are eligible for business rate cuts from local councils. There are a variety of schemes available, such as small business rate relief, if the value of your property is less than £15,000.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

Take advantage of low-cost marketing methods
Marketing on a shoestring budget can be tough, but it’s not impossible. There are plenty of creative ways to get the word out about your business without spending a fortune.

For example, make the most out of user generated content (UGC) — original, brand-specific material developed by customers and published on social media or other platforms. It can be content of any type, but usually comes in the form of images, videos, reviews, or testimonials.

By cutting through the cacophony of brands competing against each other with in-house content, UGC is favoured for its ability to capture attention, hyper–personalise the shopping experience, and increase sales.

But, best of all, creating and managing UGC is cheap, if not free. As Ucraft explains: “You do have some smart investments to make, but they will not likely reach a traditional marketing budget.” From giveaways and branded hashtags to product reviews and mentions, your startup can easily reap the rewards of this powerful and pursestring-friendly marketing tactic.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

By John Saunders

Source: London Loves Business

Marketing No Comments

What the Budget means for SMEs – all the reaction

Chancellor Rishi Sunak has announced the government’s coronavirus response which includes the promise of emergency aid worth £1bn backed by a “co-ordinated, coherent and comprehensive three point plan” with business at its heart.

He says the response is “temporary, timely and targeted” and has been drawn up with the help of the Bank of England which cut its rates by 0.5 points this morning.

Key measures announced include: For SMEs with fewer than 250 employees, the cost of providing Statutory Sick Pay to any employee off work with coronavirus will – for the first 14 days – be refunded by the government. This will be worth more than £2bn for up to two million businesses, the Chancellor says.


Businesses are to get a new ‘interruption loan’ scheme guaranteed by the government Banks will offer loans of up to £1.2m to support SMEs. The government will guarantee up to 80 per cent of losses with no fees. This, he says, will be worth up to £1bn in “attractive working capital loans”.

He will also abolish business rates altogether for this year for retailers, in a tax cut worth more than £1bn. Any company eligible for small business rates relief will be allowed a £3,000 cash grant – a £2bn injection for 700,000 small businesses.

The Bank of England slashed the base interest rate from 0.75% to 0.25% this morning to shore up the economy hours after Health Minister Nadine Dorries was diagnosed with COVID-19.

Sunak told ministers at a meeting this morning coronavirus was “front and centre” and the Budget would “make the UK one of the best placed economies in the world to manage the potential impact”.

HMRC’s Time To Pay service will also be scaled up.

He said that Entrepreneurs’ Relief will be retained, but the lifetime allowance will be reduced from £10 million to £1 million, one announcement that brought immediate criticism.

Jamie Morrison, head of private client at accountancy firm HW Fisher said: “This change is as good as abolishing it completely and this is a huge mistake. While a sensible change following proper consultation would be welcomed, this is a step too far.


“By cutting the relief entrepreneurs will only be able to benefit up to £100k during their lifetime.

“This is not enough to drive support of creativity and entrepreneurship. Businesses need consistency and this budget needs to look beyond the immediate implications of coronavirus to provide a vision beyond the next 12 months.”

John Ellmore, Director of Know Your Money said moves to support the self-employed offers some assurance to those that make up the ‘gig economy’ and support to help businesses implement self-isolation measures was welcoming.

He added: “That said, we are still left wondering as to what the long-term solution will be. Should the Coronavirus outbreak worsen, just how much assistance can the Government realistically provide to help businesses and their employees?”

“Let’s not forget the financial challenges that self-isolation can also pose to workers. It is estimated there are 2,000,000 people in the UK with no sick pay who may not be able to afford two-weeks of self-isolation.”

Andrew Mawson, founder of Advanced Workplace Associates makes the point that having the odd ‘work from home’ day is one thing, but managing large numbers of people working at home for a prolonged period of time is quite another.

“There is a lot we take for granted when we’re in the office. When we’re working away, we need to consciously develop new leadership and workership practices,” he said.

“Businesses should adapt and grow or they will diminish. Whether the required change is driven by global economics, workplace cultural changes, or imminent global pandemics such as coronavirus, businesses are having to change their ways of working. Sometimes in an instant.


“There are all sorts of reasons why people can’t get to the office. The trick is to recognise that home or remote working isn’t necessarily a bad thing.”

Mike Hampson, CEO, of Bishopsgate Financial said: “Have to hand it to Sunak, from business rates to investment in infrastructure to contingency funds for employees and SMEs amid Coronavirus Crisis delivering his first budget its sensible stuff by the chancellor.

“Increasing investment in R&D to a record £22bn a year, which is the fastest, and the largest increase in R&D ever higher than the US, China, France and Japan. In addition, significant investments in transport and technology infrastructure should provide an economic boost. Good news about Coronavirus loan scheme. Great support for #SME. However, will it be easy to access for SMEs to access these promised funds? As an SME getting loans could be painful, long and challenging.

“It’ll be interesting to see where the money is coming from when the details are published. This budget together with the earlier BoE interest rate cuts should combine to create a positive mood for the country in a time of uncertainty.”

Peter Webb, MD of Electronic Temperature Instruments, the UK’s largest digital thermometer manufacturer, said he welcomes the SSP announcement.

“These are unprecedented times and businesses of all sizes needed reassurance and a dose of confidence in order to stabilise their business and support their workforces,” he said. “What this does is it confirms the governments’ commitment to getting behind British business throughout this crisis and helps stabilise employment and supports productivity.”

Source: SME Web

Marketing No Comments

UK small businesses plan ahead despite Brexit paralysis

More than two in three (68%) small business owners have put plans in place to grow their business over the next three months, and even 59% those that fear they will struggle to survive in an uncertain year are working on positive plans to turn their business around, according to new research from Hitachi Capital Business Finance.

The findings come at a time when the proportion of UK small businesses predicting growth has hit a five-year low (down from 39% to 34%). Nonetheless, despite prolonged Brexit uncertainty, the new Hitachi data reveals a tenacity and determination among the UK small business community to keep calm and carry on, even through an unprecedented period of political and economic change for the country at large.

The Hitachi data also suggests it is Britain’s youngest small businesses that are the most can-do in putting growth plans in place for the first three months of 2019. Overall, 87% of business owners aged under 35 have been working on new growth plans (compared to 55% of those aged 55 or over). Further, the UK’s youngest businesses (those trading for less than five years) were most assertive in working on new growth initiatives (71%). With London and Manchester growing as the UK’s top tech hubs (and cities for tech jobs), the Hitachi research also noted that London (78%) and the North West (71%) were the regions where small businesses were most likely to be tackling Brexit uncertainty with proactive growth plans.

What are small businesses prioritising to achieve growth?

As part of the latest instalment of Hitachi Capital Business Barometer, which tracks small business outlook and confidence over time, Hitachi asked a nationally representative sample of 1,177 small business decision makers which initiatives they were considering in order to achieve growth in the three months to April 2019. The results paint a picture of what the small business community will be prioritising during the critical Brexit transition period in the weeks ahead.

Keep costs down and carry on

The number one issue for small businesses was controlling fixed costs. During a period of rising rents, business rate hikes and a weak pound, 41% of respondents said cost control was a top priority to help their business grow in uncertain times.  As the perceived importance of cost control hits a five-year high, a further 18% of respondents said they intended to tackle late payment. Despite recent moves by the Government to tackle this issue, there is no evidence that anything as dampened this issue for small business owners. Concern over tackling late payment is at its highest level since the start of 2017.

Cashflow remains king

Improving cash flow has also hit a five-year high as a priority for small businesses to tackle (22%). The perceived need to tackle this issue was most prevalent in the manufacturing (40%), distribution (38%) real estate (38%) and retail (33%) sectors. It was also a bigger issue among larger SMEs with a turnover of £10m or more – ventures that have more complex infrastructures and bigger cost bases to manage.

Expanding the business footprint

Expanding into new overseas markets (16%), hiring more people (15%) and investing in new equipment (12%) were all popular initiatives to secure growth, although in all these areas there was a slight dip on 2018, suggesting some small businesses could be putting on hold physical expansion plans until there is greater certainty on the Brexit outcome.

Looking an industry sectors, small businesses in agriculture were most likely to be planning to invest in new equipment (31%). Expansion into new overseas markets was led by the IT and telecoms sector (49%) and enterprises in the media and marketing sector (34%). Small businesses in the IT and telecoms sector were also those most likely to be hiring new staff in the months ahead (35%).

Initiatives that small business owners are considering to achieve growth in the three months to April 2019

Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019
Keeping fixed costs down 37% 32% 36% 37% 41%
Improving cash flow 20% 19% 19% 20% 22%
Being stricter with getting paid on time (e.g. from clients) 17% 17% 14% 16% 18%
Expanding into new markets/ overseas 20% 15% 18% 15% 16%
Hiring more people 17% 13% 15% 16% 15%
Investing in new equipment 14% 11% 13% 14% 12%
Reassessing finance commitments 8% 8% 8% 10% 8%
Streamlining supply chain 6% 6% 6% 6% 6%
Seeking financial funding via a partner/ company other than our bank 6% 5% 5% 5% 5%
Moving to a different location/ bigger office 5% 6% 5% 6% 5%
Securing financing to replace a vital business asset(s) 2% 1% 2% 2% 2%

Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance said, “We are all living with political and economic uncertainty at the moment, and getting used to living with it will become the new norm for most businesses in 2019. It is heartening to see so many small businesses going towards uncertainty and seeing it as a time to improve their business, get it in better shape and achieve growth. For smaller businesses that can adapt faster and move quicker, 2019 could be a year of great opportunity.

“That said, finance is going to be key, possibly more so than ever. At a time of uncertainty, cutting fixed costs and strengthening cash flow will be a fundamental requirement for many small businesses in order to simply operate. Beyond that, getting the right kind of finance deals and support is crucial.

“More than ever before, small businesses need access to specialist financial solutions that can nurture growth and expansion without placing undue pressure on cashflow. At Hitachi Capital Business Finance we have a range of financial products that do just that.

“Our heritage is in manufacturing not banking and as a leading finance provider we are in the business of helping small businesses growth through all the stages of an economic cycle. It makes business sense to help business customers stay in business and grow – and we will be expanding our support for the small business sector during 2019.”

Source: London Loves Business

Marketing No Comments

Small business confidence falls to lowest level since financial crash

Small business confidence has fallen to -9.9, the lowest level since the wake of the financial crash in 2011, according to the latest Federation of Small Businesses (FSB) Small Business Index.

The data revealed that 67% of small firms do not expect their performance to improve this quarter.

The index revealed that 58% of businesses say the domestic economy is a significant barrier to growth, up from 55% at this time last year.

Access to appropriately skilled staff (36%), lack of consumer demand (29%) and labour costs (21%) are also frequently flagged as primary barriers to growth.

Small businesses in the accommodation and food services (-48%), retail (-44%) and manufacturing (-16%) sectors report some of the lowest index readings.

FSB national chairman, Mike Cherry, said: “How have politicians allowed it to come to this? Two and half years on from the Brexit vote and small businesses are looking ahead to Brexit day with no idea of what environment they’ll be faced with in less than ten weeks’ time.

“The current uncertainty is making it impossible for firms to plan, hire and invest. That’s feeding into wider concern about the economy at large. We won’t see GDP growth pick-up again until there’s some certainty about how the business environment will change in the coming months.

“Come the beginning of April, small firms will not only have Brexit day to worry about but also Making Tax Digital, a higher living wage, rising auto-enrolment contributions and further business rates hikes. This will be a flashpoint for a lot of businesses, threatening the futures of many.”

The index also shows borrowing costs for small businesses soaring. The proportion of successful credit applicants being offered a borrowing rate of 5% or more has hit a record-high (74%).

The proportion of small firms applying for external finance remains low at 13%.

Cherry added: “With Brexit taking up all of the government’s bandwidth there are a huge number of domestic business issues that are not being addressed. They include the long-standing barriers small firms face when trying to access new finance, and the sky-high borrowing rates they’re often offered if an application is successful.

“This is another issue that will be exacerbated by a chaotic no-deal Brexit. When times are tough, big lenders often put supporting small businesses on hold.”

Source: Talking Retail

Marketing No Comments

How the Autumn Budget will affect SMEs

The Chancellor’s Budget announced earlier this week by Philip Hammond has promised an ‘end to austerity’ for Britain. With numerous policies to help first-time buyers, lower incomes and housing, we look at how the new Budget will impact the SME marketing in the UK.

A significant change will be the Chancellor’s attempt to help fledging high-street businesses, who have certainly felt the pinch over the last year, with noticeable casualties such as House of Fraser, BHS, Byron Burger and Jamie’s Italian.

In a move to better the current situation for high street businesses, Hammond has pledged to cut business rates by a third for all retailers with a rateable value of £51,000 or less for the next two years. This will help retailers save up to £8,000 per year and that includes high street shops, pubs, restaurants, cafes and other small business owners that are losing ground online.

A further £675m has been assigned as a Future High Streets Fund, to aid the transformation of the UK’s high streets, to improve footfall and regenerate areas in need of redevelopment.

For entrepreneurs, the start-up loan scheme originally founded by Rt Hon David Cameron will be backing a further 10,000 new businesses – this includes seed funding, start-up capital, merchant loans and business finance. A further £200m has been put aside by the British Business Bank to replace funding which they are likely to lose from the EU following the Brexit deadline in March 2019.

For SMEs that take on apprentices, the training bill will be reduced from 10% to 5%, and the government will pay the remaining 95%. Those apprentices aged 16 to 18 and working in companies of less than 50 will continue to have their training full funded.

Losing out from the Budget will be the powerhouse tech companies who started abroad but operate in the UK and use schemes to avoid paying tax. Pointing out the likes of Google, Facebook and Amazon, the tax will be imposed on those firms with a global revenue of £500 a year and the increase in tax will put £400 million back in the UK government, when it comes into place in April 2020.

Elsewhere, a scheme has been planned to offer interest free loans those struggling with debt caused by high cost credit – relating specifically to unauthorised overdrafts, rent to buy and payday products. This will be based on a consumer level and not impact businesses or sole traders using guarantor, personal or bridging loan products.

UK roads and infrastructure are expected to get a huge boost at just under £30bn in investment and first time buyers in shared ownership schemes will have their stamp duty scrapped – giving them a saving of £10,000.

Source: FinSMEs

Marketing No Comments

SME-focused fund eyes potential after lending firms £2m

A fund backed by the Scottish Government specialising in loans to Scottish SMEs that have been turned down by larger lenders has so far lent £2 million, creating hundreds of jobs, it has been revealed today.

The Scottish Microfinance Fund (SMF) is managed and delivered by community development finance institution DSL Business Finance with additional support from the Start-up Loans Company and European Regional Development Fund.

It recently held a parliamentary reception at Holyrood to celebrate its first birthday, and has lent to more than 130 new and existing firms, helping create more than 200 jobs in the last year.

The fund has a dedicated £6m pot to lend SMEs up to £25,000, and is part of a larger £40m boost from the Scottish Government’s SME Holding Fund. Interest is 6 per cent a year, and it imposes no admin or early repayment fees, or hidden charges.

DSL executive director Stuart Yuill said: “We are approached by a huge variation of SMEs from all industries; from dental design studios and cafés to clothing and fashion companies.

“Taking the leap to start your own business is a daunting prospect for many entrepreneurs, especially in today’s economic and political climate, which is tough to adapt to. But there is huge potential for the SMF in 2018, and we’ve been heartened by the number of people we’ve been able to assist in Scotland… we’ve doubled our own team, with plans to recruit another loan officer for Edinburgh.”

SMF beneficiaries include Mike Stalker and Natalie King, founders of SK Dental Design Studio, who used its loan support to fully equip and fit out their studio as well as help with cashflow until the business becomes established. Stalker said: “We wouldn’t be here without the support of DSL and the SMF. We approached the banks for a loan, and they simply were not interested.”

The parliamentary reception was sponsored by Gail Ross MSP with a keynote address from economy secretary Keith Brown on the importance of continued business growth in Scotland. The fund aims to help tackle the much-cited issue of firms, particularly in Scotland, struggling to secure the funding required to achieve their scale-up goals. The inaugural Scottish Start-up Survey published last year found that 95 per cent of respondents said they needed extra capital to move their business forward, and seeing it as a bigger immediate concern than Brexit, for example.

Additionally, a study from Barclays published in November found that in 2016 the number of Scottish high-growth firms fell to 171 from the previous year. However, UK Chancellor Philip Hammond the same month unveiled in the Autumn Budget £2.5 billion for the British Business Bank, to support UK smaller firms looking to scale up and realise their potential.

Source: Scotsman


Marketing No Comments

Pension funds, small businesses boost growth in UK alternative finance

LONDON (Reuters) – Britain’s alternative finance market grew by 43 percent in 2016, research showed on Friday, with interest from start-ups, small businesses and institutional investors helping to boost demand for services such as crowdfunding and peer-to-peer lending.

Last year, 4.6 billion pounds ($6.2 billion) was raised through alternative channels, up from 3.2 billion pounds in 2015, according to a survey of 8,300 investors and 77 crowdfunding or peer-to-peer platforms.

“Alternative finance has entered the mainstream and is likely here to stay,” said Byran Zhang, executive director of the Cambridge Centre for Alternative Finance (CCAF) at the university’s Judge Business School, which conducted the survey.

Approximately 72 percent of the year’s market volume, or 3.3 billion pounds, was driven by demand from start-ups and small businesses. That was up from 50 percent the year before.

Major banks reined in their lending in the wake of the financial crisis, and many small businesses complain of poor treatment and difficulty accessing funds.

Several alternative finance providers have sprung up to try to fill the gap, such as peer-to-peer lender Funding Circle, which announced this week it had lent more than 3 billion pounds to almost 40,000 businesses since its launch in 2010.

Another, MarketInvoice, offers peer-to-peer loans secured against businesses’ invoices and has lent 1.7 billion pounds since 2011.


After peer-to-peer business lending, the biggest categories were peer-to-peer consumer lending, peer-to-peer property lending, invoice trading, equity-based crowdfunding, real-estate crowdfunding and reward-based crowdfunding.

Institutional investors including pension funds, asset managers and banks were also increasingly backing the platforms, the survey showed. Funding from these sources accounted for 34 percent of peer-to-peer property lending, 28 percent of peer-to-peer business lending and 32 percent of peer-to-peer consumer lending.

 Peer-to-peer lending can offer relatively high returns. Funding Circle, for example, currently boasts an all-time average annual return of 6.6 percent.

But the sector’s fast growth has also caught the attention of the Financial Conduct Authority, which is looking at introducing new regulation for the sector, highlighting concerns about past loan losses and due diligence.

This week, peer-to-peer lender RateSetter, the UK’s third-largest, reported a pretax loss of 23.7 million pounds after it took a hit from a bad loan.

Source: UK Reuters