Through the UK’s rapidly growing sharing economy, alternative lenders have been created to supply businesses with finance where bank lenders have proved lacking. With the UK fast becoming the sharing economy of Europe, it’s not surprising that we are home to 10% of the businesses involved in the global sharing economy which is more than France, Germany and Spain combined.
SMEs are tremendously important to the UK economy as they employ 15.2 million people, which equates to 60% of total employment in the country. Without them, the country simply could not survive, and this is why it is vital for UK financial institutions to support them. However, this is hindered by banks simply not supporting SMEs’ expansion by denying them substantial funding on reasonable terms.
The alternatives’ impact on SME finance
The Federation of Small Businesses found at the end of 2014 that 22% of businesses were not growing due to the high cost of finance – SME owners were merely not applying. Following this, it is not complicated to see why there has been a rise in alternative lenders in 2015. Filling the void are, amongst others, Peer-to-Peer lenders. P2P lending platforms are understanding and fulfilling customer demand by offering SMEs straightforward financing solutions.
Peer-to-Peer lending grew by roughly £400m to £770million in the year to October, the Financial Times reported. P2P lenders and other alternative financers however have not quite made up the shortfall left by banks after they withdrew after the financial crisis. Alternative sources supply 25% of lending to SMEs and the British Business Bank’s key objective is to grow this figure by two fold.
An alternative option for finance for development
Wellesley & Co is a Peer-to-Peer lending platform with a unique model and offers uncomplicated options for businesses seeking finance for development. We specalise in asset-backed lending to primarily, but not exclusively, experienced property developers in England and Wales. Our innovative model works by matching our lenders’ invested funds to skilled borrowers and a unique feature is that we also invest funds in each loan that is made. Further to this, our funds are placed first, and therefore, in the case of default, we would be the first to lose any invested funds.
Our structure offers investors the opportunity to invest in the thriving British property market but also offers borrowers the much needed leg-up to help get Britain building again by delivering straightforward funding. Each application is processed and analysed by the Wellesley Credit Committee which consists of Wellesley directors, all of whom have extensive property experience and base their decisions on the confident expectation that lent funds will be paid back on schedule though a solid exit strategy.
Examples of our borrowers can be found here. Please call 0800 888 6001 or email [email protected] for any borrowing information.