The launch of the government’s latest SME growth initiative, the £30m Growth Vouchers scheme which will provide free advice worth £2,000 to 20,000 small businesses, underlines the role of invoice finance.

The scheme will offer advice in five areas, one of which is financial management and includes managing cashflow, dealing with late payments and negotiating finance. The others are leadership, digital technology, marketing and recruitment.

The inclusion of financial management emphasises the continued challenges faced by SMEs in accessing finance. Despite government efforts to improve access, generating capital for start-up funding or to maintain cashflow remains problematic, not least as traditional lenders continue to take a cautious stance with regard to small business lending.

These factors have played a major role in the growth of alternative finance, led by the likes of invoice finance, peer-to-peer lending and crowdfunding, and its shift into the mainstream. Give the current climate, it would be a great surprise if the Growth Vouchers scheme didn’t include advice on non-bank small business lending facilities and how best to use them, whether independently or in conjunction with traditional SME funding services.

The government has to deliver SME sector growth in 2014 and businesses can take encouragement from developments such as this new initiative, the refocusing of the Funding for Lending scheme and recent talk of business rates reform. Increasingly, it appears alternative finance has a key role to play.

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