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Funding your business ambitions


Accessing a business loan, whether it’s for growth, stock, office renovations, equipment or even hiring more staff, can often be a daunting prospect.

As the House of Commons Treasury Committee said in its SME Finance report last year: “It is naive to expect all business owners to possess a detailed understanding of the various financing options available to them. For many, the demands of running a business will leave little time for building financial expertise and searching the market.”

The Committee added: “A lack of competition in SME banking, which has long plagued the UK market, remains a key area of concern.”

Almost half of all SMEs don’t plan to use external finance, Bank of England Governor Mark Carney said in his Mansion House speech earlier this year, citing the “hassle or time associated with applying”. Mr Carney added that, of those SMEs that have approached their bank for a business loan, two-fifths have been rejected.

According to the Genesis Initiative report, Improving Access to Finance for UK SMEs, 52.5% of SME owners approached their high street bank first for funding. Of those, 46% did not get the funding they required. Half of those then chose to look no further, believing there were no other options.

Think Outside The Bank

There are a wide range of options for SMEs seeking to fund their ambitions with a business loan. Financial technology (fintech) platforms like LendingCrowd offer a fast and flexible alternative to banks by connecting business borrowers directly with investors.

Analysis by lending data specialist Brismo shows that the total value of business lending by fintech and other alternative finance providers across the UK rose by 18% to £2.3 billion in 2018.

Since LendingCrowd launched in late 2014, we have facilitated more than 780 business loans with a total value of over £69 million.

Our analysis shows that businesses create an average of 2.6 full-time equivalent jobs for each loan that we deliver. A quarter of respondents to our survey said they would have been “very unlikely” to obtain funding in our absence. They said that a failure to secure funds would have been a “missed opportunity” leading to a negative impact on jobs and investment.

As a responsible lender, we base our lending decisions on affordability. We may be a fintech business, but we believe that the personal approach is still important, so a human always makes the final lending decision.

To find out how LendingCrowd can help you to take your business further, Think Outside The Bank and get in touch today.

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Article author

Gareth Mackie

Gareth Mackie

If you invest through LendingCrowd you should understand that your capital is at risk.

LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (Firm reference number 670991). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Read more about the risk involved when investing and borrowing.

The company's registered office is 23 Manor Place, Edinburgh, EH3 7DX.

Copyright © LendingCrowd 2019. All rights reserved.

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