That is certainly true at least in the realms of small business funding, where new market dynamics have emerged and where recent changes have been dramatic.
Here’s a look at 4 of the most important trends in this context currently taking shape in the UK.
1 – Specialist lending
The retreat of big banks and mainstream lenders from the small business lending arena in recent years has left ambitious and perfectly viable companies having to look elsewhere to find the financial backing and the loans they need to make progress. As a result, demand for finance among small businesses is increasingly being met by relatively small-scale and specialised lenders who offer their services only to companies in a specific sector or field of operations. This increasing specialisation is a trend set to continue as awareness of trust in these services spreads among small businesses.
2 – Shift to online dealings
The Internet plays a part in our everyday lives in a myriad of ways these days and business financing is beginning to catch up with this very broadly impacting trend. There may always be a place for face-to-face dealings when it comes to agreeing business loans and financing but deals are increasingly being done online and that trend is only heading in one direction. The reason for this is not just that the Internet is all-encompassing in its reach and convenience but because it opens up the prospect of more tailored and specialist financial services being offered and accessed by small businesses that need them.
3 – Greater speed and simplicity
It is no secret that there has been a general reluctance among banks and other mainstream lenders to offer loans or financial packages of any kind to small business in recent years. Even for demonstrably viable and sustainable businesses the processes involved in applying for funding have become difficult in the extreme. No surprise then that these small businesses have been looking for and finding alternative funders who are able to offer much more streamlined and straightforward options.
4 – Crowdfunding on the rise
Crowdfunding is a term and a process gaining traction both in the public imagination and in the real world of business finance. Once the dust has settled on the concept and its initial high profile success stories, it is likely that crowdfunding will come to take its place as one of a variety of new funding options available to small businesses as alternatives to mainstream lenders. In short, the crowdfunding sector will mature in time to become a realistic potential route to financing for more and more small business with great ideas and big ambitions.
Quite how each of these trends will develop in years to come remains to be seen but it seems very likely that they will all continue to grow and gather pace, particularly with the British Government having introduced legislation designed to oblige mainstream lenders to point their rejected business loan applicants towards the websites of alternative finance providers. Certainly, with the UK economy having returned to growth, there will be growing demand for loans and finance among ambitious small businesses around the country.
Written by Keith Tully; Partner at UK firm Real Business Rescue who specialise in corporate insolvency solutions and business finance.
Image: Finance via Shutterstock
