Businesses of all shapes and sizes have had to take a long hard look at their operations in a bid to future proof themselves from a variety of Brexit-related repercussions. Hardly a week goes by when we don’t see speculation, or confirmation, of a strategy/location shift from some large players across a variety of sectors.
The UK is an economy built on business. Recent data from Bizdaq suggested that there are over one and half million (1,667,265) SMEs in the UK, with roughly seventy% of these registered as micro businesses – an indicator that the appeal in developing a business from scratch is far from being on the decline.
The role of small and medium sized businesses remains significant with around 51% of total revenue and over 60% of private sector employment generated by SMEs. These figures are huge and highlight just how integral SMEs are to the UK economy and how they need to be supported in challenging times – including better access to finance where possible.
Staying with the funding issue, the latest report from Independent Growth Finance (IGF) revealed that 71% of SMEs were seeking new funding in 2019. In addition, over half of businesses (53%) claimed that they had to wait a month or longer for traditional funding.
The report also revealed that traditional bank funding remained the top source (67%), while more than a quarter of businesses (27%) said they now used invoice financing and over one in five (22%) opted for asset-based lending.
In uncertain times. it’s evident that businesses are looking for greater control over their financial futures, but funding is not always easy to come by – especially through traditional high-street channels. The emergence of alternative forms of finance have helped plug this gap and satisfied heightened demand for simper access, ease of application and smoother processing.
Here, at Impact, we recently partnered with InterBay Commercial to provide just under £6m worth of finance for two commercial cases, mainly because of its outstanding track record in completing complex large loans.These were two multifaceted cases which needed the support of a lender who was willing to go that extra mile and think outside the box.
These are important differentiating factors in how a range of businesses can benefit from obtaining finance away from the high-street, and how the strength of relationships between packagers/distributors and lenders can facilitate such deals.
Opportunities will continue to arise within the specialist markets if the timing is right and funding is in place. Thankfully, there are enough positive indicators to suggest that most providers are moving in the right direction, despite operating in some challenging times. Which means that intermediaries should be tapping into the increased demand for alternative finance as many of their existing clients, and potential new ones, will be part of this growing SME army. And now is the time to engage with them for their business as well as personal borrowing requirements.
Dale Jannels is managing director at Impact Specialist Finance