Alternative funders launch SME portal

Alternative funders launch SME portal

Seven alternative finance lenders have teamed up to launch a new one-stop-shop web portal.

Seven alternative finance lenders have teamed up to launch a new one-stop-shop web portal.

Some of the UK’s leading alternative business funders have launched, which is designed to signpost SMEs into non-bank funding.

The new web portal launched this week and aims to simplify business owners' search for finance.

Initial funding associates - CrowdCube, Funding Circle, Market Invoice, Platform Black, Seedrs, Zopa and - collectively cover over 70 per cent of the alternative business funding market in crowdfunding, invoice trading, peer-to-peer and pension-led funding.

The firms have provided more than £580 million to SMEs to date, supporting around 80,000 jobs.

In addition, each organisation will “recycle” their rejected applicants to the site to access other potential non-bank funding sources. It also provides a platform for major banks to redirect customers which don’t meet their criteria.

In a unique collaboration; the funders aim to make borrowing easier for the country’s SMEs – whilst aiding the main banks to support rejected applicants.

With 95 per cent of SME funding still originating from banks, the organisation believes that there needs to be greater, and more relevant, signposting of alternative forms of finance for companies. With banks at risk when it comes to referring companies to other forms of finance, the platform will allow funders to share and recycle applications depending upon what sort of finance suits.

Above: The heads of the seven representatives from the Alternative Business Funding portal

The new web portal marks the start of a campaign aimed at creating a more collaborative environment for business funding and simplifying SME owners’ search for business finance.

The launch, which comes just two months after Bank of England figures showed lending to small businesses had dropped by £0.3 billion in January this year, has won praise from Matthew Fell, Director for Competitive Markets at the Confederation of British Industry.

He said: “There are lots of innovative alternative finance products on the market in the UK for growing firms but the simple fact is that most businesses aren’t aware of what’s available, or how to get hold of it. So it’s really encouraging to see some of the leading providers getting together to raise awareness of their products by launching a new one-stop-shop website.”

The latest SME Finance Monitor research shows that 45 per cent of bank loan applications fail. The associated businesses behind the portal are intent on lobbying Government to meet the recommendations of the Breedon Report, which called for clearer ‘signposting’ for unsuccessful bank applicants to find alternative funding sources. Based on the latest research this could result in more than 250,000 businesses being directed to the site.
The idea of a collaborative approach to funding was floated at the “Innovators in Finance Summit” meeting at 10 Downing Street last year. By providing alternatives such as crowdfunding, invoice financing, peer-to-peer lending and pension-led funding, most business funding options are met by the new portal, regardless of length of the finance period or whether it is based on share of equity or self-investment. Other alternative funders are set to join the portal after the initial launch.

Businesses seeking alternative finance will need to answer a few simple questions online about their company funding requirements and are signposted to only those funding options that can meet the potential requirements of the business, using a creative new approach - an at-a-glance red-amber-green traffic light system.
Funders’ contact details are provided and a simple explanation of each funding option is also provided. The portal is not competitive, as there is no cost to funders who join it, and no personal contact details from the business owners are requested so they can use the site in confidence as many times as they want.

James Meekings, Co-Founder of Funding Circle, added: “All of the platforms involved in the portal are determined to significantly enhance the availability, clarity and quality of new finance solutions to both small businesses and major banks wanting to refer unsuccessful applicants. This forms part of our wider commitment to providing fair, fast and transparent access to finance to as many small businesses as possible.”

It has also won support from business secretary Vince Cable, who added: “A new alternative business funding portal that seven funding bodies put together will enable redirection of customers.

“Anything that redirects people who are turned down by one lender, is an advance.”

The portal creation starts a process which is hoped will result in Vince Cable's British Business Bank acting as an intermediary and referring failed bank funding applications to alternative finance platforms.


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    john mcphee

    wow Great minds think alike then .my platform is planning on the same business model.i wish the guys well im sure there will be lots more in the coming years the whole peer to peer ( p2p ) thing has just started its going to be world changing in the coming years . regards john mcphee

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