Has your business suffered at the hands of coronavirus? Time to check out some alternative finance streams.
Coronavirus has seen a dramatic impact on the UK economy. Prior to 2020, we already knew about alternative finance, but it was seen more as a way to avoid using banks, than it was to boost your business. With the change in circumstances, many banks aren’t paying out as they used to, and SMEs are forced to turn to other means to stay afloat.
Of course, the UK government has also released a string of measures to try and push SME growth at this time of adversity. The UK depends heavily on the ability of SMEs and their agile responses to market changes to rescue the fledgling economy – so what can we be doing to save ourselves?
Alternative Finance Options
Alternative financing simply means that you find funding through non-traditional methods, that range with accordance to your needs. This may mean taking out an unsecured loan, attaining invoice finance revenue, or considering asset-based lending.
CBILS
The CBILS (Coronavirus Business Interruption Loan Scheme) scheme has been a lifeline for thousands of small business owners around the country. The scheme was designed to help provide finance to UK businesses who have been impacted by the Covid-19 pandemic. Under the CBILS programme, the government lends money up to £5 million. This loan does not need to be repaid for the first 12 months, and you will not incur any fees for that year either. More than 55,000 UK businesses have been approved, with £12.2 billion in CBILS funding. The deadline for CBILS has been extended to the end of November, with just 1 month left, now is the time to apply.
Since April, Funding Bay have helped raise over £25 million for businesses with an APR of 3-12%. If your business needs funding on the government CBILS scheme, get in contact with one of our brokers here.
Peer-to-Peer Lending
Peer-To-Peer Lending involves finding a firm willing to invest in your organisation, with a loan that is repaid at a later date. P2P lending allows investors to hedge their bets by investing in multiple companies, while simultaneously keeping your doors open with the initial investment. Lenders such as Funding Circle, allow the public to lend money directly to small and medium sized businesses. This kind of small business loan can boost your cash flow, manage uncertainty, or pay business expenses.
Asset Based Lending
Asset Based Lending can power SME growth in a post Covid recovery world. With asset-based lending you borrow against business assets such as a fleet, buildings, or machinery, and you can invest in assets without the upfront costs. Firms like Genesis, Close Brothers, and Ultimate Finance provide these types of alternative finance streams.
Invoice Financing
Another of the funding options available for Covid-19 recovery is invoice financing. You can borrow against those who owe you money as evidenced by your invoices. Invoice financing can save your business. Right now, over 44,000 companies in the UK are turning their unpaid invoices into instant cash with invoice finance. Includes factoring and invoice discounting, is a form of asset-based borrowing that allow you to use unpaid invoices as collateral. Some of our lenders such as Ultimate Finance, Growthlending or Bibby can provide you invoice finance.
Unsecured Loans
An unsecured loan allows a business to receive funding on the personal guarantee of the owner or CEO. While this gets you the cash you need to keep the doors open during coronavirus, you will be taking some of the financial responsibility of your company onto your own shoulders. Funding Circle offers these type of unsecured business loans.
An Overwhelming Choice in Alternative Finance
It is true, there are many, many types of alternative financing out there. Funding Bay can help you navigate your way through the options to find the best finance option for you, particular as your business weathers through the COVID-19 storm. We want to simplify the confusion of the financial market to help you and your business.
