Interview: How is alternative finance helping SMEs? » SMEInsider

Interview: How is alternative finance helping SMEs?

With businesses embracing alternative finance, SME Insider speaks to Sharon Argov and Noa Wolfson (pictured, below), co-founders of SME lending platform Fundbird. We discuss how the digital revolution has helped entrepreneurs unearth crucial funds for their business.

Tell me more about Fundbird and what you’re doing for small businesses.

Fundbird is a platform that helps SME owners find the right alternative funding, be it an unsecured loan, peer to peer loan, invoice finance, equity crowdfunding and more.

Why do you think small businesses are so attracted to alternative finance at the moment?

Before non-bank lending was available, many small businesses that were declined by the bank were often left with no choice but to close the business or experience static growth.

The emergence of the alternative finance market has provided small business owners with a new way to seek an array of solutions and models for funding, meaning that a ‘no’ from the bank, doesn’t mean a ‘no’ for good. These lenders have enabled SMEs to bypass the banks and speed up a process that previously took several weeks.

Traditional banks such as HSBC are starting to pour money into small businesses. Do you think banks are doing enough to help SMEs and microbusinesses?

There is no doubt that banks have stepped up their game in helping small businesses, with HSBC being a prime example.

The Small Business, Enterprise and Employment Bill is also a step in the right direction and we believe that banks will want to continue to improve their products and services to their SME clients.

As part of these efforts, we expect to see a growing number of collaborations between the traditional banks and alternative lenders.

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What does the future hold for small business lending; will SMEs soon rely on digital platforms such as Crowdcube?

More than $100bn has already been pushed through technology platforms since 2006 to finance small businesses, and this figure is set to grow.

Small business owners are becoming less tolerant to brokers and agents who create a barrier between them and the services they wish to access.

Whilst a total shift to digital platforms is unlikely, there will almost certainly be a rise in platforms such as Crowdcube, Funding Circle, ezbob, and Marketinvoice, and the like, as the traditional lenders simply can’t meet all the requirements of the customer.

The alternative lending market, in which crowdfunding is only one model really solves a major problem for SME’s. Most small business in the UK are fundable, they just need to be proactive and ask in the right places, which might not be a traditional source.