Energy prices in 2022 have skyrocketed. This has seen operating costs for most businesses soar, at a time when many firms are already struggling to attract customers amid a cost of living crunch.
Adrian Stalley, Head of Partnerships at Ultimate Finance, discusses the alternatives to traditional bank lending for growing SMEs…
It’s a story that has echoed around Britain since the financial crisis - the lack of funding available to businesses, particularly SMEs.
Our own SME survey found small businesses are still struggling to access the cash they need to keep their businesses running smoothly, with 73% of those surveyed revealing that they find the application process to be overly ‘long and painful’.
So, what is the solution? The Bank Referral Scheme, a government initiative designed to support SME access to funding via their high street bank provider, has so far failed to address this problem, despite figures showing that cashflow is responsible for up to 90% of small business failures.
This revealing statistic makes a clear case for a continued push for better access to funding for UK SMEs, but also highlights the barrier that many smaller businesses (particularly those with a less-than-perfect credit score) are experiencing when seeking cashflow solutions.
There’s also a definite need for more education on so-called ‘alternative finance’.
What we mean by the term ‘alternative finance’ is not FinTech platforms or crowdfunding, where a company essentially ends up with hundreds of stakeholders. What we mean is looking at alternative products, such as invoice finance or asset finance, which can be better suited to a smaller firm’s finance needs.
These alternative forms of funding are, in fact, not really ‘alternative’. They’ve been on the market for years and the market has grown exponentially over the past decade as more SMEs turn to providers who have specialist expertise when it comes to understanding the challenges that smaller businesses face.
The SME market is facing unprecedented challenges, and our research shows us that matters are being made worse for a proportion of businesses that are struggling to access funding via traditional routes.
Cashflow is a fundamental requirement for businesses, and obtaining a simple, short-term funding solution shouldn’t be a stressful undertaking.
That’s why Ultimate Finance has partnered with Currencies Direct.
Together we aim to support the business community with information on options for businesses of all shapes and sizes, in all sectors. Britain is a country of entrepreneurs and together we can help them thrive and grow, even in these uncertain times.
For more information on Ultimate Finance go to www.ultimatefinance.co.uk, email [email protected] or call 01454 279447.