According to a leading UK independent invoice specialist, too many business owners are dipping into their personal savings, borrowing from family and friends or are relying on bank overdrafts to sustain their business activities. These types of borrowing tend not to support long term business growth.
It has been researched that 14% of SME owners are turning to personal savings or loans from family or friends while 23% rely on their bank overdraft, further to this, almost a quarter of SME owners do not use external finance. There are reasons ranging from awareness and personal circumstances to why people do not turn to external financing, however there are options available.
There is a substantial amount of capital available to SMEs from both alternative and traditional lenders. Invoice Finance, unsecured personal finance, Government grants, Peer-to-Peer lending and Crowdfunding are all just a few options whereby finance can be sought.
It is understandable that SMEs become frustrated when seeking finance as there is a lack of straightforward options. The Federation of Small Businesses has long advocated broadening the sources of finance for businesses. This has over the years since the financial crisis, seen a weak link which Government, Economists, organisations and SMEs have struggled with due to the dependence on just a small number of mainstream banks providing finance. Although stagnated, an encouraging feature is that there is acceptance amongst financial services that the market needs to be diversified, decreasing the dependence on mainstream banks and opening up the market to alternative providers such as Peer-to-Peer lenders.
Peer-to-Peer lending platforms lend money to SMEs and individuals that has been lent by investors of the platforms. Although it has been researched that a small proportion of SMEs utilise Peer-to-Peer lenders, it is interesting to learn that only 13% of SME owners use a bank loan when seeking finance.
Wellesley & Co is a leading asset backed Peer-to-Peer lending platform that offers funds to small businesses and individuals. Assets that the loans are secured against include tangible assets primarily but not exclusively, limited to residential property. Asset backed lending means that if a borrower was unable to repay their loan, Wellesley could seek to sell the asset in order to recover any losses. Wellesley understand that with unique projects, it is difficult to gain funding. This is why Wellesley do not operate a ‘tick box’ application process. We offer a four hour response time from the initial application and always judge each application on their individual merits. Although our credit application process is different to that of high street lenders, we have a strict credit approval process by which each application has to be voted and approved by the Wellesley Credit Committee.
If you would like to gain funding through Wellesley please email [email protected] to discuss your options.