It has been quite a week for SMEs. If the revelations about RBS’ conduct weren’t bad enough, credit card finance use and late payment are back in the news. The turmoil underlines how important alternative finance is to this sector.

According to news reports, leaks from the FCA report into RBS’ Global Restructuring Group have shown the extent to which employees were encouraged to push SMEs into restructuring for the bank’s benefit. The news has reignited debate over bank small business lending policies and will do nothing to rebuild already weak sector trust in the institutions. Small businesses are expected to launch a £1 billion legal action against RBS in 2017.

At the same time, the small business minister Margot James has again raised the subject of late payment and its impact on small businesses. At the Conservative Party Conference, she labelled the practice an outrage, an opinion shared by the Federation of Small Businesses policy director Martin McTague, who repeated his comments from the Labour Party Conference, calling late payments “corporate bullying”. The remarks illustrate just how big an issue this remains and the inability of successive governments and independents to find a solution to the problem.

The pressure on small business finance has been further highlighted by news that the number of SME turning to credit cards to raise finance is at a shocking level. According to Legal & General statistics, the number of small businesses relying on this type of finance rose from 3% in 2009 to 23% in 2014.

What the conduct of RBS and the facts about late payment and credit card finance use make clear is that alternative finance has never been so important for small businesses. At a time of uncertainty, services such as invoice finance, asset finance and peer-to-peer lending offer not just accessibility and transparency but affordability and flexibility.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.