This week’s guest column comes from Marcus Grimshaw, chairman of the National Association of Commercial Finance Brokers (NACFB) and CEO of the Fiducia Group...
Alternative finance is continuing to grow in popularity for small business owners looking to secure funding to grow their company.
With an increasing number of lenders offering different funding options to SMEs, it’s important to understand the full range of finance so business owners can ascertain what kind of financial support is the right fit for them.
Challenger banks are relatively new to the lending scene, emerging as a result of the recent financial crisis. One reason for their popularity is that they offer SMEs a multitude of services - expanding on the traditional business offering that their high street competitors provide.
Challenger banks offer competitive borrowing rates and often have a simple loan application process to maximise lending to businesses.
Positioning themselves as the future of banking, these establishments often use technology as a key way of communicating and interacting with customers. This means that customer service is readily accessible online and over the phone, but the number of challenger banks with physical branches is less than the more traditional outlets. Many businesses still want face-to-face contact as part of their service, so it’s important to have a thorough look at what different lenders offer so you’re sure your business can work effectively with a lender that suits your company’s needs.
Challenger banks are suitable for a large range of businesses in different sectors.
As with looking for a deal on any other business investment, it is important to look around to ensure that a loan you enter into is the right one – not only for your balance sheet, but also to help with business operations. Not having knowledge of the full range of lending options on offer is often a stumbling block for many business owners when it comes to securing a loan that is most suitable for them.
The NACFB launched www.findSMEfinance.co.uk, a simple finance-matchmaking website, to help small businesses access funding through an independent broker.