Alternative to become mainstream in 2013
Borro described initiatives such as Funding for Lending and Vince Cable’s brainchild, the Business Bank, as “encouraging”. But it added that with little evidence that these schemes are working or have yet to be put in place, more needs to be done.
Paul Brett, head of business development, said: “There has been little evidence as yet that these initiatives are working with a distressingly high number of small business owners still being turned down for loans.
“We hope 2013 on the other hand will be a year of change, with more business lending schemes becoming available.”
Brett said lending could be stimulated through a variety of channels including startup and mentoring schemes and accredited non-executive director schemes, where companies can find an experienced non-executive to work with them.
Alternative lenders such as Zopa, Funding Circle, and rebuildingsociety.com have all entered the arena which Brett believes will keep the banks on their toes this year.
He added: “We will continue to challenge the industry from sidelining sources of finance that have previously been seen as alternative, especially for businesses in need. We believe non-bank lending has become a mainstream source of finance for SMEs and we know from speaking to our clients in the small business world that they don’t see it as alternative at all.
“Not only are these types of loans the only solution as traditional lending from banks has dried up but they offer a rapid and efficient service so crucial to businesses.”