Finance Fred Heritage · 25 February 2016
Small firms apply for funding while banks sleep
The reason for the growth in popularity of alternative online funding platforms amongst startups could be simpler than originally thought, new research has suggested. With banks and retail lenders generally only open during the traditional working hours of nine to five, many small business owners busy running businesses during the day are looking and applying for funding from elsewhere, during other times of the day. According to Funding Xchange, which helps firms find funding solutions, 42 per cent of UK small businesses apply for growth financing outside the hours when banks tend to be open. New data based on a sample of 1, 000 small firm loan applications also found that the hours between 5pm and 9pm were most popular with owners looking for funding online, with 22 per cent submitting applications during the watershed period. A further eight per cent tended to submit requests between 9pm and midnight, whilst seven per cent of small business owners were found to get their funding applications in early, submitting an application before 9am. Anticipating that half of all small business loan applications will be made outside of traditional working hours by the end of 2016, Funding Xchange founder Katrin Herrling said that traditional lenders are no longer awake to the needs of small businesses. corporate lenders often don’t understand that running a small business is not a nine-to-five office job, Herrling commented. ‘start-up owners are most likely to apply for funding very early or late in the day because they need to spend the traditional working day looking after customers. This is when lenders need to be open for business.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.