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Why 2018 will be another big year for alternative finance

Despite ending with the most business-friendly Budget in some time, most small business owners are likely to bid 2017 a fond farewell. At the same time, they’ll hope 2018 brings a marked upturn in fortunes.

Looking ahead, it seems clear that alternative finance will again play a major role in helping to secure funding for the investment that underpins SME sector growth. Services such as invoice finance, asset finance, peer-to-peer lending and crowdfunding look set to become even more deeply integrated into the SME lending infrastructure.

Why? Continued uncertainty surrounding Brexit, the situation around which grows murkier by the month, is a key factor, as it is likely to remain an unsettling force on the economy, with underwhelming market conditions keeping small businesses under pressure. As a result, it appears highly unlikely that traditional lenders will change their largely cautious position on SME funding.

Add to that the ongoing demands relating to business rates, cybersecurity and GDPR compliance, as well as policy-related costs such as pension auto enrolment schemes and apprenticeship and living wage legislation compliance, and it seems certain that challenges will remain around maintaining cashflow and raising capital for investment.

Despite these headwinds, the small business sector is showing resilience and this hardiness should serve companies well in the year ahead. However, they’ll need access to the full range of business lending services, bank and non-bank, if they are to continue pushing forward in 2018. As such, raising awareness of the alternative finance sector remains hugely important.

This SME in Sussex turned to peer-to-peer lending as a means of financing the purchase of new equipment. The finance package was organised at a lower rate and the capital delivered in just a few days.

It is fair to say that while small businesses will be hoping for better conditions in 2018, most will be expecting more of the same. With this in mind, small businesses owners will need all the help they can get when it comes to liquidity – non-bank finance has to be part of this funding picture.

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

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