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A Guide to Commercial Alternative Finance

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Born in the United States of America, the alternative finance revolution has landed on our shores in the last couple of years and raising finance for the SME will never quite be the same again.  It is forecast that by the end of 2015, the altfi market place will have issued new loans of well in excess of £4 billion.

Gone are the days of going cap in hand to the business banker clutching armfuls of finger in the air financial projections produced, at cost, by your accountant.  Gone also are the days of waiting interminable amounts of time jumping through endless banking hoops whilst our “local” banker presents funding cases to far flung decision makers.  Gone are the days of being forced to proffer more and more personal security to support the funding requests of a growing company.

With the SME denied the help of traditional banks, largely due to the outcome of the 2008 crash and the impact of the Basle Accords on bank liquidity ratios, but with demand for vital sources of working capital still there, the number of alternative finance providers ready to plug funding gaps has grown apace.

Businesses come in all shapes, sizes and hues and, as a consequence, every business has its own unique funding requirements.  Alternative finance providers have emerged to focus on specific segments within the SME funding mix.  This is great news for the SME exploring its funding options, but the myriad of potential solutions does create its own challenges and the plethora of new players delivering multiple options can make it somewhat overwhelming for the uninitiated to tread a well planned path through the maze of new finance providers.

In an unstable economic climate banks are less likely to lend – especially to risky business investments. In today’s unpredictable financial market, it is becoming more and more difficult to get approved for a bank loan, which is why the trend for alternative finance solutions keeps on growing. Without these alternative funding options, many businesses would have ceased trading or would-be successful property investors wouldn’t have been able to buy a second property. Read more →

How to Finance a Start-up Business

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Starting a business in the current economic climate, with Brexit looming, is a challenge – some would say an impossible way. But innovation stops for nobody, so entrepreneurs planning to launch a business only have one thing in their way – financial limitations. Funding a start-up business is extremely difficult because there is no way to prove if a business will be profitable or not. Lending to a start-up is tremendously risky, and many banks and financial institutions are not willing to take that risk.

So without the help of a bank loan, how can a start-up get off the ground? Start-up finance is a niche and can be a difficult uphill struggle, but there are a range of investment options to explore as a new business. Securing the funding is a vital step to launching your business idea – here are some ways to finance a start-up business. Read more →

Beat the Big Banks with Alternative Finance

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Sometimes in life it’s better to go with the ‘alternative’ option. It could be an unconventional route to your dream career or simply a distinct taste in music, but for many of us the alternative seems like the right choice. When it comes to lending, alternative finance options are becoming mainstream thanks to big banks refusing funding to the majority of start-up businesses.

The conventional banking system simply isn’t working for most of us. Without alternative finance providers offering solutions such as peer-to-peer lending, crowdfunding and asset finance, most businesses wouldn’t be here today. These alternative finance specialists are plugging the gap the banks can’t fill, and giving a boost to the economy. Read more →

Why Has Crowdfunding and P2P Lending Become so Popular?

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Last year in the UK, peer to peer lending reached new heights – lending £3.2bn across 2016, which is up 39% from the year before. Crowdfunding and P2P platforms have been around for over a decade now, and are showing no signs of slowing down. But what has made them so popular, especially with start-ups, small businesses and medium sized enterprises?

There’s a number of factors which have contributed to the boom of alternative finance solutions, such as peer to peer lending and crowdfunding. The uncertain global economic market has definitely played a part, as the recession impacted banks and traditional lenders. Also, consumers and now much more comfortable using the internet to apply for loans and transfer money, which opens up a wealth of opportunity for the financial sector.

Discovering Crowdfunding and P2P Lending?

They are often grouped together but there is a distinct difference between crowdfunding platforms and peer to peer lending. In both cases, it is usually a number of investors who will contribute to the amount you borrow.

P2P is very similar to a business loan from a bank, except that you’re borrowing off real people. You’ll pay back interest to your investors in return for the borrowed finance, and it’s a flexible way for companies to receive a fast cash injection.

Crowdfunding is different because you will receive money from a group of individuals or organisations to make up the amount you require. You will then need to offer your backers some sort of reward – for start-ups this could be a perk such as a discount or free product. Alternatively, if you’re looking for big investors then you may need to offer equity in your business or a profit share – think of Dragon’s Den.

Usually, crowdfunding is a great option for entrepreneurs and start-ups while peer to peer lending is more suited to established businesses.

Why are they so Popular?

These types of alternative finance are now mainstream because it is so difficult to get a traditional business loan from a bank. Lending has decreased for years now, making it impossible for people to get their business ideas off the ground. Without personal investment, entrepreneurs are left with no choice but to pitch their idea online to investors. Even established businesses with a strong trading history can struggle to be accepted for financial help from a bank.

Another reason why peer to peer lending is attractive is the generally low interest rates. If you apply for P2P through a financial broker, they will look at all offers and all interest rates and offer an average interest rate. Larger financial institutions have less competition so don’t offer the best deal.

Ready to see what all the fuss is about? Contact us to find out more about P2P or crowdfunding.

How does Peer to Peer Lending Work?

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Unless you have been actively seeking a loan or financial help in the past few years, you may not have come across the term ‘peer to peer lending.’ However, after receiving quite a few years of global success, peer to peer funding has took the financial market by storm.

Peer to peer lending platforms hit the financial market about a decade ago – but there are still many Brits who have never heard of it or don’t understand how this type of borrowing works. Alternative finance solutions such as crowdfunding and peer to peer lending can help businesses access cash which wouldn’t be available to them from a bank, and is also a way for investors to get a healthy return. Peer to peer lending schemes can also be used for personal borrowing, to fund debt consolidation or home improvements for example.

Because this is so far away from traditional lending, it can be difficult to understand. Genie Lending’s peer to peer specialists explain below everything you need to know about peer to peer lending.

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How to Fund Your Business in 2017

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Whether you’re setting up a new business or planning to expand in 2017, there are various options to explore when it comes to business growth funding. Gone are the days where you had to beg your local bank for a traditional business loan with no proof of revenue. There are many different alternative finance options available to entrepreneurs and business owners to make their dreams become reality. Read more →

Which Loan is Best for You?

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There are many different reasons why you may need a loan. You could be using the cash to buy a new car, start up a business or simply pay off outstanding bills. There are many different financial solutions available, and depending on the purpose of the loan there could be an option which is more suitable than another. The decision is also based on how much money you need to borrow, and how quick you can pay it back. Let’s take a look at some of the different loans available and which one suits you best. Read more →

Should I Apply for a Business Loan?

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Applying for a business loan is a difficult decision. However, many business owners don’t have a choice if they want to keep their businesses up and running. Business loans provide vital funding to help manage cash flow when times are hard, or to give owners the opportunity to expand and increase income over a period of time. Read more →