The latest business finance report for the British Banking Association (BBA) revealed that the nation’s firms are turning to alternative lenders in increasing numbers.
Traditionally, when a British business needs cash it turns to the banks. In the UK, 80% of all business loan applications are for traditional bank loans. However, in other parts of the world, companies use a range of financial tools.
As an example, in the UK, only 3% of small or medium-sized enterprises (SMEs) apply for equity finance. Across the rest of Europe, the average usage of equity financing is 7%. In Denmark, it is 41%.
However, there are signs that this is changing, with more British companies realising that they can use the equity in their assets to provide them with the cash that they need. The latest statistics from the Asset Based Finance Association showed that UK firms had borrowed a total of £18.9bn from asset-based lenders between April and June, 2014.
Figures from the Bank of England revealed that peer-to-peer lending has also grown. In total, £280m was raised in this way during the first six months of 2014. The use of invoice financing has also doubled since 2012.
Asset finance brokers are becoming busier as more British enterprises realise that using such solutions can be a fast and relatively cheap way to solve cash flow problems, as well as to raise capital for expansion. At DJB, we specialise in all kinds of asset based lending. Contact us today to learn how we can help your business to get the cash that it needs.
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