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The world of finance has moved on, moving to a new normal in which innovative funding platforms and peer to peer lending offer a viable alternative source of finance
Are you a permanent non-borrower or a happy non-seeker of credit, do you have access to the loan funds that you need or are you caught by the Macmillan gap and having trouble in raising long-term funding? Whatever your business funding requirements, according to a recent speech by MPC member Ian McCafferty it’s a fair bet that thanks to the financial crisis if you are a SME the way in which you view finance requirements and sources of finance has changed forever.
In fact, Ian McCafferty says that his discussions with the owners of small businesses have highlighted the fact that “for many, their relationship with their bank was damaged by the financial crisis.” As a consequence of that, even though SME funding request rejection rates of fallen, businesses can still be reluctant to approach their banks. This has led to a rise in alternative sources of finance such as crowdfunding or peer-to-peer lending including supply chain finance.
Although sources such as these at present represent only a small proportion of overall lending, alternative finance is a growing market and as Ian McCafferty says “may well, in due course, help to solve the age-old problem of the “funding gap” faced by SMEs.” In essence, the world of finance has moved on, moving to a new normal in which innovative funding platforms and peer to peer lending offer a viable alternative source of finance for SMEs.