Figures released by the Peer to Peer Finance Association reveal that lending via the peer-to-peer and crowdlending sector has soared in the first six months of this year. During this period the amount lent has doubled with platforms having lent out over £500m in the six months putting it on track to break the £1bn barrier for 2014.

The figure lent comprises of funds advanced to both consumers and businesses but it was growth in money lent to businesses that has led the way.

In the first quarter of 2014 £132m of new money was lent to business and this increased to £146m in the second quarter. The number of businesses borrowing via P2P has also increased from 5,169 in the first quarter to 5,919 as at the end of June.

There has also been an increase in the number of lenders supporting businesses with a movement from 31,616 to 35,477.

The growth demonstrates how businesses are quickly embracing this innovative way of raising finance.

The growth in crowdfunding comes on the back of clear signs that businesses are looking to expand and hence on the hunt for finance. A recent survey from Albion Ventures showed that a third of businesses plan to raise finance in the next 12 months. Of these 27% are targeting capital for business development and 23% looking to expand their premises. With crowdfunding sites such as Funding Circle already entering the commercial mortgage market the peer-to-peer market is well placed to satisfy demand from businesses.

If you want to know how you can use crowdfunding and peer-to-peer lending to support your growth plans read more here or simply complete the contact box at the foot of this page.

In this week’s Business Finance Bulletin I look at how small businesses continue to suffer from cashflow problems due to late payments. Surveys from the Asset Based Finance Association and BACS reveal the extent to which SMEs are being held back by late payment… find out how.

Poor cashflow has led to businesses falling behind in VAT repayments; with insights from specialist finance lender LDF showing how overdue VAT is on the up, this is one example of the impact of late payment.

In its quest to improve access to advice and finance I have news on the government’s revamp of its Great Business website and of £10m lent by the British Business Bank to Ratesetter for on-lending to individuals.

In the Business Finance Tip of the Week I have a guest tip from Steve White of Thornbury Collection Services on the excuses businesses trot out when they are overdue on payments.

Posted on 16.04.2014, by Rob Warlow

In the latest Business Finance Bulletin it’s a good news edition with positive news about the UK economy and reports of a soaring crowdfunding market. Rob Warlow looks at reports from the P2P Finance Association on funds being lent out by crowdfunding platforms and the launch of a new crowdfunding site Landbay.

Rob also looks at a new pot of money being set aside by HSBC for lending to growing SMEs. Video is a way of getting your message across to lenders about your business and Rob talks about Crowdbox, a new service hosting business video pitches.

In the Tip of the Week Rob features a clip from a seminar he hosted in Amsterdam for Wealth Coach Kevin Green talking about the importance of financial information when approaching your bank for business finance.

In this week’s episode Rob Warlow looks at a report carried out by Bibby Financial Services on micro businesses and in particular the problems surrounding succession. In a further sign of the crowdfunding sector gaining more visibility Rob talks about a new arrangement between crowdfunding platforms and certain bank members of the British Bankers Association on the issue of sharing security.

Rob also shares his thoughts on the importance of diversifying your funding sources so you are not dependent on just one bank.

In the Business Finance Tip of the Week Rob looks at one aspect of getting a ‘no’ from your bank – why you should not see it as a fail.

Our latest Friday Business Finance Bulletin is out and this week Rob Warlow talks about the start of the new financial regulatory framework with the Financial Conduct Authority going live.

Rob also take a look at the consultation paper released by the government asking whether banks should be forced to refer clients to alternative sources of finance when the bank has said ‘no’.

Whether banks are up for lending to businesses is always the subject of debate and we look at the findings on bank lending appetite.

And in the Tip of the Week Rob share his ideas on what you can do to prepare for your annual bank visit and review meeting. Enjoy!

Posted on 25.02.2014, by Rob Warlow

With the economy picking up confidence is beginning to return and small to medium sized manufacturers in England are set to embark on a major investment drive in order to meet expected increase in demand.

A survey from the Manufacturing Advisory Service (MAS) has revealed that 86% of respondents were planning to invest in capital equipment over the next twelve months, with companies looking to spend £121,000 on average.

Two thirds of the firms questioned are looking to purchase new plant and machinery, and just over half are focused on upgrading IT/communications infrastructure and nearly a third on improving premises.

So what’s prompting this investment drive?

The key reasons cited by those businesses surveyed were boosting efficiency and quality (31%), followed by developing new products/processes (30%) and extending existing capacity (22%).

Interestingly fewer than one in five companies (19%) said they planned to approach banks to fund capital equipment purchases in the next year, with manufacturers instead choosing to secure money via grants (27%) and the Regional Growth Fund (21%).

A even more positive sign that the economy is kicking back into life is that 62% of companies reported an increase in sales over the last six months, whilst over three quarters of businesses (76%) expect to boost sales between now and June 2014.

If you are looking at growth plans this year then we’re happy to have a chat about your financing options.

One alternative source of business finance that is growing in popularity is family and friends.

In this clip taken from an ‘Access to Finance’ seminar for the accountancy body, ACCA, Rob Warlow talks about the pros and cons of getting business finance from this source.

Beware!

Posted on 21.02.2014, by Rob Warlow

In this week’s Business Finance Bulletin Rob Warlow chats with entrepreneurship guru Robert Craven on the key aspects of business growth. More news on another new entrant into the banking market which promises to support small businesses with their finance needs.

And in the Tip of the Week Rob shares his thoughts on taking time out of your business which came out of a day spent with members of the Infinite Group of business advisers.

Posted on 05.02.2014

With 2014 being a year of growth for many businesses, as we have talked about before in this blog, the question is how is that growth going to be financed?

Whilst there is evidence to suggest that banks are dipping their toes back into the market and avenues for alternative sources of finance continue to grow, one area of funding that is under-utilised and little understood is equity.

A recent report issued by the CBI, ‘Slice of the Pie: Tackling the Under-Utilisation of Equity Finance’, has revealed that just 3% of small and medium-sized businesses use this type of finance.

Raising equity to release cash involves shareholders selling a slice of their business and yet for many business owners this is a step too far. Not unsurprisingly the report reveals that the biggest barrier to improved demand for equity finance is the perception of losing ownership. 46% of businesses say they will not considering using equity finance due to concerns about losing ownership and decision-making power.

The CBI survey finds though that 68% of those firms which have raised finance this way believe that the investment had a positive impact on their business. As a result, four out of five of these businesses said that they would use additional equity finance to fund their business growth in the future. Bringing in new capital has also helped 26% of businesses gain additional external finance.

These businesses are ready-made advocates of equity finance, with 81% saying that they would recommend equity finance to another business.

Against the background of these benefits the CBI has recommended the following actions:

• All parties should proactively promote the benefits that equity finance can bring to a business and dispel the myths about it being a less attractive form of finance
• The government’s soon to be launched Business Bank should develop an equity/finance option to help ease businesses concerns about losing control.
• Government should trial adjusting the criteria of its equity co-investment schemes, such as Business Angel Co-Investment Fund and Enterprise Capital Funds,
• Government should pilot a simple tax incentive to encourage retail investors to hold shares on a longer-term basis
• HMRC must streamline the application process for small and medium-sized businesses to gain Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) qualifying status

Posted on 23.01.2014, by Rob Warlow

Face with growing outcries about the continual fall in bank lending, the main High Street banks have launched a new campaign to get businesses borrowing.

The banks, together with the British Bankers Association, are keen to let businesses know they are a lot more likely to get bank finance than they think. The banks, which include Barclays, HSBC, Lloyds, Nat West, RBS and Santander, quote a recent SME Finance Monitor report which says that while only 37% of SMEs planning to apply for finance believe they will get approval from their bank, actual approval rates are a lot higher at almost 67%.

The research from the BDRC survey identified as many as 270,000 businesses that wanted to apply for finance but never actually ended up doing so. It attributes a lack of confidence in their chances of success as one of the key reasons for this.

The message of the campaign is that increasing confidence amongst businesses around lending has the potential to boost the UK economy, as if all of those businesses went ahead and applied for finance this could enable:

• 53,000 small and medium sized businesses expand in the UK
• 48,000 new orders for equipment
• 113,000 businesses to boost their spending power
• 16,000 companies to develop new products or significantly improve their offering to customers

The 12-month campaign will be aimed at businesses with a turnover of less than £25million, and working alongside the government, politicians, banks and business groups it will spread the message that SMEs are a lot more likely to get finance than they think.

The campaign, featuring online advertising and social media outreach, will provide top tips for finance success, promote schemes such as business mentoring and showcase examples of businesses that have gone on to grow and prosper after securing a loan.