More SMEs turning to alternative finance as Brexit approaches
MORE businesses are now exploring alternative finance options rather than relying on traditional borrowing methods, research claims.
Analysis by commercial finance provider Wesleyan Bank found that rather than small- and medium-sized enterprises (SMEs) relying on overdrafts, savings and credit cards to facilitate growth, 59 per cent had used external funding – including routes such as crowdfunding and invoice finance – on at least one occasion against only 30 per cent in the same survey in 2016.
A quarter, 27 per cent, stated that they now “regularly” turn to external finance, up from 20 per cent two years ago.
The figures came from Wesleyan Bank’s SME Heroes or Zeroes 2018 report, showing that despite Brexit being on the horizon, 65 per cent of firms anticipate growth of up to 40 per cent over the next two years.
Read more: A quarter of UK SMEs planning to go for global growth
The report reveals that 54 per cent are feeling “more confident” about their firm’s prospects one year on and just 11 per cent are “concerned” about the potential impact of Brexit.
Despite an uncertain UK economy, the findings highlight a significant shift in defiance from business owners, with 50 per cent adamant that Britain’s exit from the European Union will not dictate their firm’s strategy compared to 28 per cent in 2017.
“The UK’s economic outlook is often clouded by negativity, but this research highlights that SMEs are performing strongly and have built solid foundations to prosper, both pre and post Brexit,” Paul Slapa, head of direct sales at Wesleyan Bank, said.
“Unless there is a material impact on their business today, there is no reason why SMEs should put on hold their investment plans to sustain and maximise growth.
“By leveraging external financial support from specialist lenders, SMEs can benefit from flexible funding solutions to spread the cost of purchasing new equipment and technologies to gain a faster return on investment.”
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