Alternative finance is going mainstream » SMEInsider

Alternative finance is going mainstream

The alternative finance market may be in need of a new name. Now worth over £1bn in the UK, the industry is no longer a secondary route to finance. Instead, it’s fast becoming a serious challenger to traditional bank loans.

Last year, the Bank of England’s own figures showed that lending by high street banks fell sharply, by around £400m, while new approaches, such as peer-to-peer lending, ballooned. According to Louise Beaumont, founder of major alternative lending provider Platform Black, the industry has been growing by 90% year-on-year.

Beaumont, who joined GLI Finance as its head of public affairs after the company acquired Platform Black, told This is Money: “If 2014 was the year that alternative finance came of age, then 2015 is the year that it will finally shake off its prefix of being alternative.

Although the proportion of annual UK business lending provided by alternative finance is still a drop in the ocean at 2.4 per cent, it is this sector which is incubating the businesses fuelling our economy – the small and medium-sized enterprises.”

She added: “There is no doubt that the demand for alternative finance will grow dramatically in 2015 as more and more SMEs realise the potential and benefits of alternative finance providers.”