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Why 2020 will be another big year for alternative finance

Small businesses desperately need economic stability and growth. While it remains to be seen if the new government will deliver it, whatever happens over the next 12 months, affordable and flexible SME lending services will be vital.

The general election result was definitive and, in terms of government at least, there is a clear path ahead. Going forward, all eyes will be on how the government manages the economy and in particular the Brexit process. Small business owners will be paying particular attention. The uncertainty surrounding Brexit has been damaging and policy developments in areas such as business rates and late payment have been largely unsatisfactory. As such, an upturn in consumer confidence and trading conditions is much needed.

Of course, while the picture is clearer, it is still uncertain how the UK is going to leave the EU and what impact this will have on the economy. New plans may be announced in the coming weeks and a new agreement may be made before the January deadline but, regardless of the timetable, the process of leaving is likely to be complex given how embedded the relationship with the EU is.

So, while some may be more optimistic about 2020, most small business owners are likely to continue to take a pragmatic approach to planning. To this end, as serious questions remain about the UK economy in the short term, it is important that businesses have a secure, comprehensive funding strategy in place. This financial framework should include alternative finance.

In the wake of extended caution from traditional lenders, the likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are redrawing the small business funding landscape. These facilities, which offer a more personalised approach to lending, are helping small businesses grow. They are providing them with access to capital, on an affordable and flexible basis, to help manage cash flow and for critical investment.

This is how a Sussex small business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new equipment.

Small businesses are very important to the UK economy and, as such, it is vital that they thrive. There is hope that 2020 will bring new momentum and fresh growth, but at the same time, there is recognition that it may take some time before there is a meaningful upturn in conditions.

As such, in order to maintain performance and to take opportunities when they arise, business owners need to be able to access funding when they need it on an affordable and flexible basis. This is why alternative finance will remain a critical SME funding service in 2020.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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