Due to the drop in the pound since the start of 2016 many businesses in the UK have been forced to increase their prices due to higher input costs.  According to secured bank lender Borro, slow bank lending is restricting small business growth during this time. Alternative finance lenders can provide funding in a fraction of the time banks typically take, but lack of awareness and confidence that this service exists means businesses still believe that banks are the best, or only, option.

According to the latest preliminary data, UK gross domestic product (GDP) is estimated to have increased by only 0.3% over the last quarter (Jan to March 2017), which is the slowest rate of growth since Quarter 1, 2016. This is largely due to reduced growth in the restaurant, retail and accommodation industries, which had to increase prices when the pound dropped after the EU referendum.

During challenging times like these, businesses commonly seek funding to help them cover costs and continue to grow. However, Borro’s CEO Paul Aitken has expressed concern that businesses are being negatively impacted by slow bank lending, saying “Bank lending speeds have remained static despite improvements in technology, consumer credit checks and a steadier market.

If the industry is serious about supporting business growth in the UK, it’s critical lending speeds are improved. We know business owners are missing out on opportunities to expand purely due to lack of available cash.”

The latest Bridging Trends data shows that the average bridging completion time for UK loans is 50 days. Given that these types of loans are meant to be short term solutions designed to “bridge” gaps in debt or cash flow during pressing circumstances, this is inconvenient for business owners. Fortunately, there are options other than banks available.

Alternative Sources of Funding For Small Businesses

Slow bank lending shouldn’t impact business growth, and the reality is that it doesn’t have to. There are alternative sources of funds for businesses which are specially designed to accommodate their needs. In fact, the Association of Alternative Business Finance (AABF) was formed earlier this year to increase knowledge and awareness of the industry. Its aim is to inform businesses in the UK so they know they have a choice in funding, and that banks aren’t the only option.

As one of seven founding members, Liberis is focused on providing small businesses with the short term funding they need to enable growth. They’re understanding of how small businesses operate and know that speed is important, which is why in many cases, they can give businesses a decision in 24 hours. With 30% of businesses valuing alternative finance for its speed and simplicity, it’s evidently a favourable solution for providing businesses with funding when they need it most.