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Alternative Finance blog

Small business asset finance on the rise

Small business asset finance on the rise

2 years ago

The British Business Bank, the UKs national economic development bank, has a good news story to tell alternative finance investors in small businesses in the UK. According to their 2018 Small Business Finance Markets report the value of SME asset finance deals rose 12% in 2017 compared to 2016, whilst the value of peer-to-peer (P2P) jumped 51% over the same period. And entrepreneurial activity is growing too. A record 5.7 million companies were recorded in the UK in 2017 along with the creation of a record 414,000 new businesses. If you are in doubt of the alternative finance sectors ability to grow it is worth noting that the report found the major Banks continued to dominate SME funding, just 43% of SMEs felt confident they could get a loan against a 72% loan application and just 1.7% of small businesses sought new loans, which they believe is the lowest level seen since 2011.

The Equity Crowdfunding sector is under attack again from the Times and not without reason. Ruther Emery wrote about Square Pie, which collapsed leaving a lot of rather angry investors (324 to be precise) in its wake. The “pie bond” that promised 8% annual interest over 4 years was offered via Crowdcube and since its collapse questions are being raised about the level of due diligence that platforms are undertaking when they vet companies. One commentator suggested that “Crowdcube should have done more to point out the risks to investors.” Here at businessagent.com we believe an informed investor is a happy investor and would suggest that LARGE risk warnings that you may lose some or all of your investment aren’t at the heart of what the square pie collapse means for investors. Rather it is whether expectations of vetting are being met, and the ability to compare data that is regularly produced in a standardised fashion across platforms and investment opportunities. Right now, it is difficult to compare something as simple as charges – as even the co-founder of the crowdfunding association Julia Groves pointed out. Want to lend your voice to ours in demanding more from the platforms?

To see the latest investment opportunities across the UKs crowdfunding platforms and the most up to date estimated annual interest rates from P2P sites take a look at the investor section at businessagent.com




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