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Spurned by mainstream lenders, small firm owners lose business and embrace alternative finance

Almost one-third of British small business owners have been unable to close a business deal after being rejected by bank finance, according to new research by alternative finance provider Amicus.

The survey of 400 small firm leaders also revealed that 16 per cent have been rejected by a mainstream lender, while just under one-in-six think banks take too long to give an answer following loan applications.

Half of those asked had either used alternative finance in the past or were considering doing so in the future.

it’s clear from this research that the demand for alternative sources of finance is continuing to grow in popularity, said John Jenkins, CEO of Amicus.

mainstream lenders are falling short in terms of the agility and speed that is required by SME owners seeking finance, he added.

Additional research published by the Cambridge Centre for Alternative Finance in February 2016 revealed that the UK alternative finance industry grew by more than 80 per cent in 2015 though it currently accounts for just 12 per cent of lending to British businesses.

we should celebrate this massive increase in market share, said MarketInvoice CEO Anil Stocker when the report was published. Alternative finance is alternative no more businesses have been under-served and badly-served by banks for decades, it’s no wonder they’re looking for something new.