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• 22 Jan

  Comment On Alternative Finance Demand As Overdraft Approvals Reduce

  I have just posted the following comment on a LinkedIn post about the demand for alternative finance as overdraft and loan approvals reduce:

  "The latest Q3 2015 SME Monitor conducted by BDRC Continental sheds some light on this (5,000 SME sample interviewed). 80% of all loan and overdraft applications, in the last 18 months, resulted in a facility - an improvement on previous results - that leaves the 20% that are unsuccessful. Only 36% of SMEs were using any form of external finance - stable over the preceding year, but having declined from 46% in 2011 - so the growing majority are not using any external finance at all. 39% wanted to pay down debt/be debt free but they said they would borrow in the right circumstances - to finance growth. To me it seems key that the alternative finance sector can help in two ways. It can serve many of the 20% of those that were rejected for loans or overdrafts, that is still an incredibly large number of businesses. Secondly, those businesses that are fast growing - many of which need flexible forms of finance that will grow with their business, turn to alternative finance rather than traditional loans and overdrafts that are more fixed by nature".

  My interpretation of this data is that whilst the majority of businesses may be "finance adverse" there is still a significant proportion that need external finance and they cannot be overlooked just because a majority of businesses have cash reserves at the present time. We are still here to help those who need to raise finance and in particular those who are fast-growing, and who need alternative business finance. For help call Sean on 03330 113622.

  By Glenn Blackman